A Kenya court has reportedly frozen an additional US$3.3 million in accounts belonging to Africa’s biggest Fintech firm, Flutterwave, over allegations of money laundering and card fraud, which the company has flatly denied.
The court granted the Asset Recovery Agency’s (ARA) application on August 25 to prevent Flutterwave from transferring or withdrawing the funds in three bank accounts – two in UBA and one in Access Bank; and 19 Safaricom M-Pesa paybill numbers.
In July, Kenya’s Asset Recovery Agency (ARA) got a court order to freeze 56 bank accounts which seven companies had used to launder KES7 billion (~$59.2 million). Fifty-two of the bank accounts—holding KES7 billion—belonged to Flutterwave.
At the time, the ARA alleged that Flutterwave had no records of providing merchant services in Kenya. It also claimed that the fintech was operating a payment service platform without authorisation from the central bank of Kenya (CBK), a claim which the CBK itself confirmed.
The CBK went further to order Kenyan commercial banks, microfinance banks, and mortgage finance companies to immediately end their partnerships with fintech unicorns, Flutterwave.
In this latest case, the ARA filings revealed that in one of Flutterwave’s UBA bank accounts, debits amounting to KES136 million included chargebacks, reversals, and refunds which indicated that they were being used for card fraud. The agency also said the conversion of dollars into shillings in that account, in a transaction worth KES231 million, pointed to “a scheme of layering and intermingling”.
The court froze funds worth KES400.6 million ($3.3 million) across three banks including UBA, Access Bank, and Safaricom M-Pesa.
The ARA’s court order allows the Agency to freeze the bank accounts for 90 days while its case against Flutterwave will appear in court later in November.
But Flutterwave has completely denied allegations of fraud and any wrong doing, in a response to Techgh24, saying that the “Recent reports regarding Flutterwave and Kenya are completely misleading. There have been no charges brought by any agency in Kenya against the company, its staff, or directors.”
They explained that the stories circulating go further to make reference to card fraud through chargebacks, refunds, and reversals, which would not be applicable in reference to M-PESA paybill accounts.
Flutterwave also said “From the start of this process, we have been cooperating fully with the Assets and Recovery Agency in its review and we are providing regulators with complete transparency into our business operations, which reflect our adherence to global best practices.We are confident that they will find Flutterwave is operating in full accordance with the law.”