A Nairobi court has ordered the freezing of 45 bank accounts and 10 mobile money wallets belonging to Flutterwave Payments Technology, a Nigerian-owned financial technology firm facing multiple money laundering allegations. The freeze comes as numerous individuals and companies seek to recover billions of shillings that the firm allegedly stashed in local banks.
High Court judge Alfred Mabeya issued the freezing orders after a group of 2,468 Nigerian nationals filed a lawsuit against Flutterwave, claiming that the company defrauded them of $12.04 million (approximately Sh1.6 billion).
The Nigerian nationals have named six local financial institutions as interested parties in the lawsuit. These include United Bank of Africa, Access Bank, Guaranty Trust Bank, Equity Bank, and Ecobank, as well as Safaricom, where Flutterwave operates 10 pay bill numbers.
Justice Mabeya deemed the application as urgent and granted the freezing of the bank accounts, bank keys, and mobile money wallets for a period of 14 days. Further directions regarding the case will be provided on 21st June 2023.
The court documents do not specify the exact amounts held in the frozen bank accounts and mobile money wallets; however, the Nigerian claimants in the lawsuit believe that the funds involved amount to billions of shillings.
This new lawsuit adds further pressure on Flutterwave, which has been seeking a license from the Central Bank of Kenya (CBK) while facing ongoing legal battles and regulatory challenges.
In a separate dispute, Hong Kong-based Lae Technologies has included Flutterwave and seven other companies as interested parties in an alleged breach of contract with RemX Ltd, a company suspected to have connections with Flutterwave. Lae Technologies is seeking a freeze on several bank accounts, anticipating the recovery of at least $88 million (approximately Sh12.2 billion) owed to them by RemX.
In 2022, the Assets Recovery Agency (ARA) obtained freezing orders against Flutterwave and eight other Nigerian companies, whose bank accounts held a total of Sh6.2 billion. The ARA was investigating these companies for alleged money laundering, suspecting them of being involved in the movement of proceeds from criminal activities and engaging in credit card fraud.
The companies involved in the case include RemX Capital Ltd, Pumicells Ltd, OIT Africa Ltd, Multigate Ltd, RemX Investment Partners Ltd, Avalon Offshore Logistics Ltd, and Kandon Technologies Ltd.
In February 2023, the Assets Recovery Agency (ARA) withdrew its case against these companies, allowing them access to the frozen funds.
Flutterwave Payments Technology Ltd is a subsidiary of US-based Flutterwave Inc. It is registered in California as a payment technology and infrastructure provider, with operations in multiple African countries, including Kenya and Nigeria.
According to the Business Registration Service records, Flutterwave Payments Technology is owned by Flutterwave Inc (247,000 shares) and Olugbenga Agboola (3,000 shares), who is also the CEO of Flutterwave Inc. The company was co-founded in 2016 by Olugbenga Agboola, Iyinoluwa Aboyeji, and Adeleke Adekoya.
The court documents reveal that the petitioners invested money into a sports betting platform known as 86 Football Technology Ltd, also referred to as 86W, 86FB, and 86Z. The platform allegedly deceived bettors by claiming to use scientific formulas and having connections with the City Football Group, which controls clubs like Manchester City. However, it turned out to be a Ponzi scheme, and it is alleged that a significant amount of the funds from the scheme was funneled through Flutterwave.
On June 7, 2023, Justice Mabeya ordered the Ponzi scheme victims to serve Flutterwave Payment Solutions and the six institutions holding their funds with the court papers. The parties will appear before Justice Mabeya on June 21 for further directions regarding the case, including the potential extension of the freezing orders.
Morris Ebitimi Joseph led the Nigerian victims in joining the ARA case, but when the ARA withdrew its case, the victims’ claim was also dismissed.
