Friday , June 14 2024

Kenyan Court Rejects Flutterwave’s Case Withdrawal Request

The High Court of Kenya, the third-highest court in the nation, has rejected the Assets Recovery Agency of Kenya’s (ARA) plans to abandon its second lawsuit against the African fintech business Flutterwave.

Prior to this, the agency had previously frozen $3 million that belonged to Flutterwave, Hupesi Solutions, and Adguru Technology Limited in August of 2022 due to suspicions of fraud and money laundering.

The money was taken two months after the ARA frozen accounts belonging to Flutterwave and six other businesses for an additional $52.5 million.

Following each seizure, the ARA filed a lawsuit, the first of which was formally withdrawn in March of this year.

The application to dismiss the second action was denied by High Court judge Nixon Sifuna, who highlighted in his judgement that the ARA, as a public-funded entity, was unable to provide grounds for the withdrawal, including “negotiations or settlement, or the terms of such negotiations or settlement.”

Regardless of the fact that the agency included an affidavit from its investigator and a plethora of documents, including bank statements, as proof indicating that the millions in the fintech’s bank and mobile money accounts were profits of crime and money laundering, the fintech was not charged.

The judge questioned the agency’s allegation that it no longer had any proof of the supposed crime.

“The bodies entrusted with the duty to fight corruption, economic crime, organised crime, and similar vices (including money laundering) should not abdicate their divine duty or become complicit in such vices,” said Judge Sifuna, refusing the withdrawal, he explained that the legal proceedings will be decided upon receipt of an affidavit sworn by the agency’s CEO or a high-ranking officer.

He stated that the agency’s decisions or activities must be “open and beyond reproach in the public eye,” and that its decisions or actions must “be open and beyond reproach in the public eye.”

The judgement is anticipated to significantly hinder its ability to secure a licence to conduct business in Kenya. The government claims that in both occasions, Flutterwave’s bank accounts were used as conduits for money laundering under the guise of merchant services.

It asserted that Flutterwave was at fault for not providing documentation to support client retail transactions. It continued by stating that there was no documentation of any settlements with the alleged merchants.

Flutterwave was established in 2016 to allow cross-border payments in Africa by Iyinoluwa Aboyeji, Olugbenga “GB” Agboola (CEO), and Adeleke Adekoya.

It has since grown to include Tuition, an education payments network, Flutterwave Store, a Shopify-like e-commerce platform for small businesses, and a remittance service that lets users send money to and from the continent.

One of Africa’s most valuable companies, it received $350 million at a $3 billion valuation in 2022. However, it has had to deal with a number of problems, such as claims of mismanagement, misappropriation of funds, and harassment.

Check Also

E-commerce Logistics Partner Renda Raises $1.9 Million to Expand Across Nigeria, Kenya

Renda, a Nigerian logistics startup that counts Jumia and MarketForce as top clients, has raised …

Leave a Reply

Your email address will not be published. Required fields are marked *