Flutterwave funds still frozen as Kenyan Court thwarts move to withdraw case

Judge Nixon Sifuna of the Kenyan High Court has denied an attempt to withdraw a case against African fintech unicorn, Flutterwave. As such, the fintech’s accounts will remain frozen. This also implies that Flutterwave may wait a while longer before getting an operational license in the country.  

Despite not yet having a license, the company has repeatedly been in the news for the wrong reasons. Recall that Kenya’s Asset Recovery Agency (ARA) launched a case against the unicorn, Hupesi Solutions, and Adguru Technology Limited over claims of money laundering and fraud. As a result, $3.3 million in three bank accounts and 19 M-Pesa paybill numbers were frozen. 

This case follows the first one where the High Court blocked access to 62 accounts containing $52.5 million that belonged to Flutterwave and six other companies. The funds were eventually released following the ARA’s decision to withdraw the case. 

Declining the ARA’s second attempt to have a Flutterwave case withdrawn, Judge Sifuna cited the government agency’s inability to justify why the case should be closed. The Judge stated that public agencies like the ARA must always conduct themselves in a manner that doesn’t betray the trust of Kenyan taxpayers. He also decried the current trend of recovery institutions filing cases against companies and then seeking to withdraw them.

Judge Sifuna highlighted the fact that the ARA said it had volumes of evidence to back its claim that Flutterwave engaged in wrongdoing. According to the agency, the millions found in the fintech’s bank accounts and M-Pesa paybill accounts were “proceeds of crime and as well as money laundering.” The ARA’s investigator, Corporal Isaac Natikare, even swore an affidavit, saying that he had compiled evidence for the case. 

Curious to know where the proof went, Judge Sifuna asked “What about the volumes of documents that accompanied the suit at the time of the filling? What about the evidence that the said Corporal Natikare on oath in his Affidavit stated he had over a period of time collected, and which is on the Court file hitherto in five volumes?” 

Before denying the case withdrawal effort, Judge Sifuna spotlighted the Kenyan Constitution. According to him, the document states that businesses and individuals are required to not only justify their wealth but reveal the source and how they were amassed.

Read also: Flutterwave set to make first major acquisition of 2023 

What this means for Flutterwave 

Following the ruling, Flutterwave’s case not only drags on, but the judgment dampens the unicorn’s move to get an operational license in Kenya. This comes after the company revealed plans to establish an office in the East African country three months ago. 

And with the court denying ARA’s motion to withdraw the case, it’s worth asking how it will impact its image. Recall that Flutterwave operates in countries like Nigeria, Rwanda, and Egypt. 

Meanwhile, the ARA’s attempt to withdraw the second case does beg an all-important question about its integrity. Why move to close a case after claiming it had substantial evidence to pursue it?