Kenyan court clears Flutterwave of money laundering charges as ARA withdraws last lawsuit

A Kenyan High Court has approved the Asset Recovery Agency’s (ARA) motion to drop its final lawsuit against Flutterwave, bringing an end to the company’s legal entanglements in Kenya. This decision follows the court’s denial of the agency’s request to withdraw its second lawsuit against the Nigerian fintech in July 2023.

The legal tussle arose from allegations of money laundering and fraudulent activities, leading to the freezing of over $3 million belonging to Flutterwave, Hupesi Solutions, and Adguru Technology Limited in August 2022. However, subsequent investigations revealed no evidence of illegal conduct by Flutterwave, prompting the ARA to withdraw the case.

The judge, while delivering the ruling, faulted the agency for filing the case without completing its investigations, saying, “It was inappropriate, negligent, reckless, and absurd for an investigative agency to commence such serious proceedings without having completed investigations.”

“After considering all the facts presented to this court, the withdrawal is hereby allowed, and this suit is marked as withdrawn,” he said

However, the judge imposed a condition that the agency’s director and investigator bear any potential civil liabilities “solely and personally”, citing the negligent manner in which the case was investigated and pursued.

“This is given the negligent, reckless, careless and rash manner in which this case was investigated, and these proceedings were instituted and driven,” he said.

Flutterwave, previously flagged by the Central Bank of Kenya for operating without a remittance license, is relieved by the withdrawal of the final case. The company has been expanding its operations in Kenya, intending to establish its primary operations station in Nairobi for the East African market.

Flutterwave to consolidate on court ruling for expansion

Flutterwave had earlier this year disclosed its intention to establish an office in Nairobi, Kenya, as it sought to expand services in East Africa. The payments giant has had its fair share of trouble with the Kenyan government, having delays in receiving an operating licence brought about by the ARA lawsuits.

In the course of its struggles in Kenya, the ARA froze and subsequently released funds in different instances, including the initial freezing of $52 million and the subsequent release of $52.5 million following the withdrawal of the first case. The recent withdrawal of the last case against Flutterwave brings an end to its legal challenges in the country.

The ARA’s decision to also release the $3 million previously inaccessible to Flutterwave and co-accused entities is driven by a lack of evidence supporting alleged criminal activities. The recent court ruling now allows the company to operate freely and pursue investment and expansion in the region.