Over 2,000 Nigerian investors have petitioned Kenyan courts to release funds which were earlier frozen by the Asset Recovery Agency (ARA) in a fraud investigation against fintech unicorn Flutterwave.
In July this year, Kenya’s Asset Recovery Agency (ARA) got a court order to freeze 56 bank accounts which seven companies had used to allegedly launder about US$59.2 million.
Of the seven companies, Africa’s fintech firm, Flutterwave alone had about US$56.2 million frozen in 52 accounts from several banks including Guarantee Trust Bank, EcoBank, and Equity Bank.
Later in August, the Kenyan regulator received another order to freeze more accounts belonging to Flutterwave. The court froze funds worth US$3.3 million across three banks including UBA, Access Bank, and Safaricom M-Pesa.
But now, about 2,468 Nigerian investors say their money is part of the money frozen by the ARA sp they want their money back.
Spokesperson for the litigants, Morris Ebitimi Joseph explained to Business Daily that they invested in a company called 86 Football Technology—also known as 86FB, 86Z, or 86W. The investors made deposits for an investment scheme that promised better returns which did not come to fruition.
Investigations by the investors led them to believe that they had been swindled to the tune of almost $12 million by a dubious person via transactions on Flutterwave.
Now, they want Kenyan courts to separate the US$11.9 million plus out of Flutterwave’s frozen US$56.2 million and release it to them.
“I believe that the issuance of an order compelling Guarantee Trust Bank, Equity Bank and Ecobank to deposit the sums excluded in the bank accounts of our advocates, justice shall be served to the 2,468 interested parties who were swindled of their hard-earned money through the scheme,” Ebitimi said.
While the Central Bank of Kenya has accused Flutterwave of operating without a license, the fintech has maintained that it submitted an application for licensing back in 2019, citing the country’s notoriously long licensing process.
Flutterwave has also denied any wrongdoing in Kenya claiming that the Kenyan regulator is targetting Nigerian firms for no justifiable reasons
Meanwhile, the ARA’s freeze order is valid only for 90 days as it gears up for its case against Flutterwave which is set to appear in court in November.
Flutterwave forges ahead
In the midst of these challenges, Flutterwave has secured two major licenses in Nigeria which allows it to extend its services across the continent and elsewhere. It has also enabled Google Pay for African business and eNaira transactions for over a million Nigerian merchants.
The company is also set to for its first IPO (initial public offer) on NASDAQ at a US$3 billion valuation.