Friday, February 23, 2024
HomeAfricaFlutterwave Cleared in Kenya as Anti-money Laundering Agency Drops Its Final Lawsuit...

Flutterwave Cleared in Kenya as Anti-money Laundering Agency Drops Its Final Lawsuit Against the Fintech

  • A Kenyan High Court has reportedly granted the Asset Recovery Agency’s (ARA) request to drop its final lawsuit against Flutterwave. 
  • This news follows the court’s denial of the anti-money laundering agency’s request to withdraw its second lawsuit against the Nigerian fintech in July 2023.
  • Due to allegations of money laundering and fraudulent activity, the agency froze over $3 million in August 2022 for Flutterwave, Hupesi Solutions, and Adguru Technology Limited. 

However, the ARA has withdrawn the case because more research showed that Flutterwave was not engaged in any illegal activity, including fraud and money laundering.

“After considering all the facts presented to this court, as well as my earlier ruling on the agency’s request for withdrawal of this suit, the withdrawal is hereby allowed and this suit is marked as withdrawn,” the judge said in his ruling.

The judge went on to state that the withdrawal was contingent upon the director of the agency and the investigator bearing “solely and personally” all future civil or tortious liabilities rather than passing to the Kenyan government or requiring the use of public funds.

“This is given the negligent, reckless, careless and rash manner in which this case was investigated, and these proceedings were instituted and driven,” he said.

Kenya intends to release the $3 million that Flutterwave and its co-accused, Adguru and Hupesi Solutions, couldn’t access.

In 2022, the Assets Recovery Agency (ARA) froze the accounts of Flutterwave and eight Nigerian companies, including RemX Capital Ltd, Avalon Offshore Logistics Ltd, and Kandon Technologies Ltd.

ARA was investigating the companies at the time for potential money laundering because it thought they were moving criminal proceeds and using credit card fraud. 

However, the ARA dropped its initial lawsuit against the businesses in February 2023, allowing them to access the funds. Thus, it released $52.5 million to Flutterwave.

The unicorn, on the other hand, is relieved that the final case has been withdrawn after receiving a warning from the Central Bank of Kenya in 2022 for operating without a remittance licence and attempting to obtain a payments service provider licence. 

In addition, Flutterwave is stepping up its efforts to penetrate the country. In April 2023, Flutterwave announced it would establish its primary operations station in Nairobi for the East African market. 

In September 2023, the company, which received first-name approval from the CBK, announced plans to invest $50 million in Kenya once it gets a licence.

A timeline of Flutterwave’s troubles in Kenya

  • July 2022: Asset Recovery Agency (ARA) freezes $52 million in accounts linked to Flutterwave.
  • September 2022: ARA freezes another $3.3 million belonging to Flutterwave
  • February 2023: A Kenyan court ordered the release of the $52 million frozen in July 2022. 
  • June 2023: A court in Nairobi, Kenya, froze another 45 bank accounts belonging to Fluttewave in connection with 2,468 investors who claim they were scammed by 86 Football Technology Ltd (86FB, 86W, and 86Z), a Ponzi scheme that crashed in April 2022.
  • July 2023: Judge stops ARA from withdrawing its case against Flutterwave because it didn’t make sense to withdraw a case after presenting so much evidence.
  • November 2023: Court grants ARA’s motion to withdraw its case against Flutterwave. Flutterwave is free.

Source: Techpoint

RELATED ARTICLES

TRANSLATE

Most Popular