56 bank accounts belonging to the Nigerian fintech champion, Flutterwave Payment Technology Limited and 6 other businesses have been frozen by a High Court in Kenya.
A report by The Star listed Boxtrip travel and tours limited, Bagtrip travel limited, Elivalat fintech limited, Adguru technology limited, Hupesi solutions, Cruz ride auto limited and one Simon Ngige as the 6 other companies whose bank accounts have also been affected.
What spawn the action?
The court order came in response to money laundering allegations leveled against the aforementioned companies by Kenya’s Asset Recovery Agency (ARA). The frozen accounts which are reported to be in American Dollars, British Pound Sterling, EURO and Kenyan shillings, are said to hold a total of Sh7 billion ($59 million).
According to ARA’s statements which were reported by The Star, their investigations uncovered that the 56 bank accounts ran operations that were considered suspicious and Flutterwave (owning 52 of these bank accounts) was found at the head of these operations.
An investigator with ARA—Isaac Nakitare—in an affidavit, explained that, by the time he obtained the orders to search and inspect the accounts (April 4), Flutterwave’s 29 Guaranty Trust bank accounts had a total balance of $44,896,230.04, their 17 Equity bank accounts had $11,859,381.52 and other millions at the company’s 6 Ecobank accounts.
He also mentioned that the company’s Equity account number (created in November, 2020) revealed that sometime in May 2021, it received 185 online card payments; all of which share the same bank identification number.
“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,” he said.
What is Flutterwave saying?
In response to the allegations, Flutterwave has published a statement in which they strongly maintain that all of ARA’s claims of financial improprieties are entirely false.
“Flutterwave has a responsibility to ensure the integrity of the ecosystem, and we pledge our commitment to continue to work with all stakeholders to uphold this. We are working to figure out the motive behind the publication, and have the records straightened.” the statement reiterates.
In an SMS to Peoples Gazette, Flutterwave’s CEO, Olugbenga “GB” Agboola said that the charges were politically motivated. “Why are Nigerian companies in Kenya being targeted by Kenya ARA? This is happening near their election time.” Olugbenga said. And in fact, the companies affected by the court order are companies either owned or managed by Nigerians.
The likes of Boxtrip travels and tours which is listed to be directed by Enyioma Olufemi; Bagtrip travels, directed by Taiwo Soyemi; And Aduru technology limited, which is directed by Adaeze Okonkwo, and Caroline Muchina; all of whom are Nigerians.
While these questions hover in mid-air, it is worth noting that ARA’s allegations wouldn’t be the first scandal to hit the 6-year-old fintech company. Here are some of the previous scandals that have rocked the company’s foundations:
Financial Mismanagement Scandal
2022 alone has seen wave after wave of allegations being leveled against the company.
In late April, 2022, 86fb/86z—a subsidiary of City Football Group—had alleged that Flutterwave had maliciously seized its funds; subsequently straining the company’s efforts to pay up its investors.
The African unicorn, Flutterwave, in a statement had refuted their claims while emphasizing that they are not a bank but a payment processor. “All transactions passed through the Flutterwave payment platform are treated and settled in line with regulatory requirements. We also settled all funds due to these merchants. No funds currently due to the merchants are with Flutterwave” the fintech company stated.
Another scandal that rocked the internet came on April 4th, 2022, when a former executive at Flutterwave—Clara Wanjiku— had announced that Flutterwave’s CEO had bullied her for almost 5 years.
She claimed that the company which had owed her some dues—without showing interest in clearing them out—had also unjustly accused her of spreading false rumors about them and furthermore sabotaged her chances of finding another job in the financial sector.
In a report titled “Flutterwave: The African Unicorn Built on Quicksand”, David Hundeyin, Nigerian journalist stated that, “The further I dug into this maze of documents and recordings, the only way for a Flutterwave employee or ex employee to ensure that GB pays them what they are owed is to weaponize a relationship with one of his investors. He only responds to superior power, not threats, pleas or even lawsuits.”
Sexual Harassment scandals
During the company’s early years (around 2018), reports of sexual harassments were making rounds within the establishment. Rest of World reported that it received intel from inside sources who whispered allegations against the then Chief Financial Officer—Ifeoluwa Orioke — as well as some other senior executives, whom they claimed were acting with impunity and pursued sexual relationships with more-junior staff, including teammates.
In 2019, a widely shared recording of one of Flutterwave’s all-hands meeting had seen Gbenga review sexual harassment policies of several domestic and international corporation. He had further stated that the relationship that exists between his employees are their own business. Hence, without substantial proof of these sexual allegations ever happening, they had simply been waved away as false and/or recycled claims.
What to expect in the coming days
Despite all the mishaps, Flutterwave has shown resilience after every storm it faces and we can only expect that this time won’t be any different.
The official case hearing in Kenya is slated for 7th November, 2022; but before then, we shall have our eyes peeled for any more developments as the story progresses.