After a turbulent 12 months mired with allegations of links to money laundering rings and corporate mismanagement, Nigerian unicorn Flutterwave is finally moving into calmer waters.
The Kenyan Asset Recovery Agency (ARA) accused Nigerian fintech Flutterwave of money laundering last July, but the company is now ready to move forward after the withdrawal of these claims.
In Nairobi high court filings of the time, the ARA suspected the fintech of being a conduit for financial crime. As a result of the issued ex parte order, 62 bank accounts belonging to Flutterwave, which were suspected to contain illicit funds in the region of $52million, were frozen as part of an investigation into card fraud and money laundering.
The ARA’s suspicions were that Flutterwave had deliberately tried to conceal the movement and source of the funds which passed from multiple countries to local bank accounts owned by fintech before continuing on into the accounts of six other companies.
In addition to this, the Central Bank of Kenya (CBK) placed an embargo on the company amid the controversy and advised the country’s banks to disengage with the fintech. This was amid a petition to access frozen funds, signed by 2000 Nigerians, who allege that a sports betting platform defrauded them of their capital, with Flutterwave technology processing its payments.
The fintech vehemently denied these allegations and continued to maintain its innocence in the matter through a released statement at the time.
“Claims of financial improprieties involving the company in Kenya are entirely false, and we have the records to verify this,” Flutterwave’s counterstatement reads. “We are a financial technology company that maintains the highest regulatory standards in our operations.”
Now six months after the accusations came to light, it appears that Flutterwave’s statement of innocence was in earnest.
Withdrawal of claims
Flutterwave welcomes the news that the ARA dropped the charges against the fintech due to a lack of evidence.
“I’m pleased to have this matter resolved so we can resume our work with our strategic partners in Kenya,” said Olugbenga Agboola, the founder and CEO of the fintech, who flew to Kenya this week to finalise resolutions with the CBK.
“The fintech sector in Africa, with its new entrants and accelerated pace of growth attracts a considerable amount of scrutiny and at times, suspicion,” he continued. “Given our own rapid growth and status as a first mover, we anticipate and welcome the opportunity to be transparent about our operations and cooperate with regulators.”
Flutterwave has instituted a number of changes over the past year to ensure the adherence of its internal governance structures to Kenyan money laundering laws.
This includes the recent appointment of Mastercard alumni Emmanuel Efenure to the position of VP and head of risk for Africa.
The fintech is also engaging with the ‘big four’ accounting companies to support independent internal audit programmes, which will subject company AML and CFT policies to annual reviews in conjunction with the fintech’s own resolution of its procedures.
“We take corporate governance and transparency very seriously at Flutterwave,” said Cathy Kinyua, Flutterwave’s regional expansions and partnerships manager for East Africa. “This update should reassure our partners and stakeholders across the continent that we have complied with all regulations and laws in Kenya, as well as all other markets where we operate.”
Onwards and upwards
Following the controversy to surround the fintech throughout the past year, Flutterwave is preparing to place this turbulent chapter in the past as it puts its best foot forward for the future.
The recovery of the fintech’s reputation is being bolstered by its newly obtained payment services provider and facilitator licences in Egypt, its switching and processing licence which the fintech received from the Central Bank of Nigeria (CBN) and its newfound collaboration with Google Pay.
Flutterwave also renewed its operational license in Tanzania and South Africa, as well as its IMTO license in Nigeria. In June 2022, the company announced the appointments of Oneal Bhambani to CFO and Gurbhej Dillon as CTO.