African fintech giant Flutterwave has suffered a major blow after the High Court rejected a request by Kenya’s Assets Recovery Agency (ARA) to withdraw its second case against it.
This comes after ARA, in August 2022, froze $3 million belonging to Flutterwave, Adguru Technology Limited and Hupesi Solutions on allegations of money laundering and fraud.
The agency froze the cash two months after freezing another $52.5 million linked to the fintech and six other companies even as the first case was formally withdrawn in March.
Justice Nixon Sifuna rejected ARA’s bid to withdraw the second charge saying the public agency had not given the court sufficient reasons for seeking to withdraw the case.
According to Justice Sifuna, the agency did not provide details of any negotiations or settlement by the two sides or the terms of such negotiations or settlement out of court.
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“Public agencies such as Assets Recovery Agency (ARA) being sustained by pubic funds and resources, must be accountable to the Kenyan public,” said Justice Sifuna in his ruling.
He added, “They and the persons working for them must at all times be guided by the public interest, and in all their actions and decisions embrace patriotism, transparency and accountability as core values under our constitution.”
In its case in court, ARA had included an affidavit from its investigator Corporal Isaac Nakitare, bank statements and other documents to prove that cash in Flutterwave’s bank and M-Pesa accounts were proceeds of crime and money laundering.
"What about the volumes of documents that accompanied the suit at the time of filing? What about the said Corporal Nakitare, on oath in his affidavit stated he had over a period of time collected, and which is on the court file hitherto in five volumes?" the judge wondered.
In rejecting the withdrawal application, the judge raised issue with the state agency for changing its mind in the case and now claiming to lack any evidence of the alleged crimes.
“The bodies entrusted with the duty to fight corruption, economic crime, organized crime and similar vices should not abdicate their divine duty or become complicit in such vices,” warned Justice Sifuna.
The judge said his court will only determine the matter after receiving an affidavit sworn by the CEO of ARA or any other prominent official to protect public interest in the matter.
The move by the Nairobi court to refuse to withdraw the case against Flutterwave is slated to delay its efforts to acquire an operating license from the Central Bank of Kenya (CBK).
In its response to the July 20 court decision, Flutterwave has maintained that its operations have been above board and in full compliance with the laws in Kenya and elsewhere.
“It is essential, however, to emphasize that our operations have always been and will continue to be conducted in strict compliance with the law,” said the firm’s Spokesperson.
He added, “Our commitment to ethical practices and adherence to regulatory requirements is unwavering and we are actively cooperating with all the relevant authorities to ensure an expeditious resolution.”
In its court filings, ARA had claimed Flutterwave’s bank accounts were used as channels for money laundering hidden as merchant services and that it had failed to prove otherwise.
Flutterwave was founded by Olugbenga Agboola, Iyinoluwa Aboyeji and Adeleke Adekoya to expedite cross-border payments in Africa and has expanded to include a remittance service, e-commerce platform Flutterwave Store, and education payment platform Tuition.
