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Pan-African Financial Firm Accused of Cash-Flow Scam in Kenya

ARA fingered Guarantee Trust Bank and EcoBank among other financial firms to have abetted Flutterwave’s scam.

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Mohammed Yakubu
Mohammed Yakubu
Mohammed Yakubu is an investigative journalist reporting on public health, human rights, climate change, education, gender issues, and much more.

KENYA: Sequel to the financial crime charges levelled against Flutterwave, a pan-African fintech payment firm, the Kenya government has frozen bank accounts operating in its name following the scam. According to findings, the firm breached Kenyan financial regulations. 

Yesterday, the Kenyan authority flagged down seven firms suspected to be involved in illicit cash flow. Flutterwave, according to the country’s Asset Recovery Agency (ARA) had the largest share of the scam rolling up to $56.7 million (6.7 billion Kenyan shillings). Hence, freezing its account became imperative.

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Reportedly, Flutterwave operated 29 bank accounts with Guaranty Trust Bank, 17 with Equity Bank and six with Ecobank.

The prosecutors alleged in their filings.”

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Flutterwave came under probe a few months ago. The authorities secured warrants to seize the firm’s accounts in April. The provisional seizure permit was granted for 90 days, and the matter is to be heard on November 7.

The tussle intensified following a report by a Nigerian-based journalist, David Hundeyin, exposing Flutterwave’s misconduct in April 2022.  Gbenga Agboola, the CEO of Flutterwave, debunked Hudeyin’s report. But assured that he would ensure sanity in the company’s management.

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The ‘Scam’ that Led to Accounts Freezing

Agboola’s company, per The Star, was accused of illicit cash transfers to the tune of  $101 million (12 billion Kenyan shillings). This was way before its cover was blown.

According to ARA, Agboola and his cohorts in Nairobi, the Kenyan capital city, were involved in online card payments numbering at least 185. 

“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 the Kenyan prosecutors.

ARA fingered Guarantee Trust Bank and EcoBank among other financial firms to have abetted Flutterwave’s scam.

However, Flutterwave in a statement denied the scam allegation, saying, “claims of financial discrepancies involving the company in Kenya are entirely farce and are being circulated as part of a  defamation campaign. We have been a target of deliberate false media reports and misrepresentations.”

He went on record saying, “Through our financial institution partners, we collect and pay on behalf of merchants and corporate entities. In the process, we earn our fees through a transaction charge, records of which are available and can be verified. As a business, we hold corporate funds to support our operations and provide services to all our customers.

“By facilitating payments for the biggest organizations in the world and everyday businesses, we process significantly large volumes of money and contribute to growing the economy in Kenya, and the rest of Africa.”

The company also stated its role as a payment merchant in Kenya, noting that its Anti-Money Laundering practices were always audited by an unnamed reputable firm and it complied with regulatory bodies.

“We are a financial technology company that maintains the highest regulatory standards in our operations. Our Anti-money laundering practices and operations are regularly audited by one of the big four firms. We remain proactive in our engagements with regulatory bodies to continue to stay good.”

ALSO READ: South Africa Earned USD 53 Billion From Minerals in 2021

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  • Mohammed Yakubu

    Mohammed Yakubu is an investigative journalist reporting on public health, human rights, climate change, education, gender issues, and much more.

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