Kenya’s Asset Recovery Agency said Flutterwave conducted suspicious transactions and failed to comply with financial regulations in Kenya, Nairobi-based The Star reports. According to the platform, Flutterwave was one of about seven fintechs contained in an indictment bill. A Kenyan High Court has seized $59 million from 56 accounts belonging to the fintechs including Flutterwave.
According to The Star, the company operated 29 bank accounts with Guaranty Trust Bank, 17 with Equity Bank and 6 with Ecobank and this allowed them to conceal the nature, source or movement of the funds.
“Investigations established that the bank accounts operations had suspicious activities where funds could be received from specific foreign entities which raised suspicion. The funds were then transferred to related accounts as opposed to settlement to merchants,” prosecutors alleged in filings.
The indictment notes that Flutterwave chief executive Olugbenga Agboola conducted suspicious transactions to the tune of $101 million dollars before officials became aware of his activities.
The Star also reports that Agboola’s partners secretly conducted about 185 online card payments using the same identification number.
The country’s anti-money laundering detectives also flagged several other suspicious transactions, including one in which Agboola allegedly connived with another Nigerian national to launder cash through the Kenyan banking system.
“If indeed the Flutterwave was providing merchant services, there was no evidence of retail transactions from customers paying for goods and services. Further, there is no evidence of settlements to the alleged merchants,” Kenyan prosecutors added.
In a statement to Peoples Gazette, Agboola said the charges were politically motivated, adding that Flutterwave was not the only Nigerian business to be targeted by the Kenyan authorities.
“Why are Nigerian companies in Kenya being targeted by Kenya ARA?” Agboola said. “This is happening near their election time.”
“Claims of financial improprieties involving the company in Kenya are entirely false, and we have the records to verify this. We are a financial technology company that maintains the highest regulatory standards in our operations. Our Anti-money laundering practices and operations are regularly audited by one of the Big four firms. We remain proactive in our engagements with regulatory bodies to continue to stay compliant,” the fintech said in a statement to TechCrunch.
The latest indictment comes on the heels of a piece by West Africa Weekly, a Substack newsletter written by journalist David Hundeyin, revealing damning allegations against the startup and Agboola.
Some of the allegations levelled against Agboola in the article include insider trading, perjury and sexual harassment. How he founded the company was also questioned in the investigative piece.
The report by Hundeyin said Agboola retained his employment at Access Bank while building his startup Flutterwave. But in the email to staff, Agboola told workers that “the allegations about how I started the company are untrue. I shared with you during the retreat that a former boss helped us close one of our enterprise clients. I am thankful for the learning and mentorship I received at the numerous employers I worked at before starting Flutterwave.”
On insider trading, he said he and Flutterwave have not engaged in insider trading, adding that ex-employees sold shares they owned to outside parties at some points.
“We followed all legal processes and procedures, including obtaining board approval when needed, when approving the sale of shares,” he wrote. “In addition, we work closely with our outside law firms to comply with all applicable regulations.”
Addressing claims of sexual harassment, he noted such claims have been proven false or have been reported, investigated and addressed by management.
The report by Hundeyin followed an allegation of bullying against Flutterwave and Agboola by an ex-employee who is the current CEO of Credrails.