Flutterwave is once again embroiled in news that calls into question the legitimacy of its operations, following an exposé that alleged insider trading and abuse at the Africa’s biggest unicorn.
How the saga started?
Recently, Kenya’s Asset Recovery Agency (ARA) got a court order to freeze 56 bank accounts which 7 companies had used to launder 7 billion Ksh (~ $59.2 million).
The companies include Boxtrip Travel and Tours Limited, Bagtrip Travel Limited, Elivalat Fintech Limited, Adguru Technology Limited, Hupesi Solutions, Cruz Ride Auto Limited, Simon Ngige (an individual), and Flutterwave.
According to The Star, the ARA received court orders in April, days before the initial exposé was published, to search and inspect Flutterwave’s 52 Kenyan bank accounts—29 with Guaranty Trust Bank, 17 with Equity Bank, and 6 with Ecobank, all holding about Ksh 7 billion.
Months later, its results showed that there were suspicious transactions within the accounts.
“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,” said the Agency.
Why Flutterwave’s account was frozen
A more damning claim by the ARA is that Flutterwave is operating a payment service platform without authorisation from the Central Bank of Kenya (CBK).
The Agency also claims there’s little to no record of transactions from customers paying for goods and services.
“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,” said Isaac Nakitare, an investigator with the ARA.
Apparently, most of the monies received in Flutterwave’s Kenyan accounts include “suspicious deposits that indicate smurfing activities hoping to evade detection.”