Nigerian start-up Flutterwave has recovered over $50 million after the Kenyan government dropped charges of financial impropriety. This is a significant win for the company, which had been accused of mishandling public funds. The charges were dropped after a lengthy investigation found no evidence of wrongdoing. This is a major relief for the company, which had been facing the prospect of a lengthy legal battle.
The Asset Recovery Agency (ARA) had filed a suit against Flutterwave, leading to the freezing of the cash in 62 bank accounts belonging to Fintech and four Kenyans. The suit was based on fears of card fraud and money laundering, allegations which Flutterwave denied.
However, the Kenyan government last week withdrew these charges against Flutterwave, and ARA has filed a notice to drop the suit and lift the asset freezing orders. The case will be mentioned in the High Court on February 14th, where the withdrawal decision will be confirmed.
The company’s CEO and co-founder Olugbenga Agboola, flew into Kenya last week amid efforts to get a licence from the Central Bank of Kenya (CBK).
Flutterwave has denied the allegations of financial impropriety and has welcomed the decision of the Kenyan government to withdraw the charges.
“Flutterwave welcomes the withdrawal of claims against the company by the Asset Recovery Agency (ARA) in July 2022 and looks forward to market expansion in Kenya. As a result, Flutterwave has been cleared of any wrongdoing. Flutterwave has fully cooperated with all stages of this review,” the company said in a statement on Thursday.
The development comes as a huge relief for Flutterwave, which is a fintech company based in Lagos and San Francisco that offers its payments services to facilitate cross-border transactions in multiple currencies. The company, which was last valued at more than $3 billion, has raised more than $450 million in VC funding and is preparing for an initial public offering on the Nasdaq stock exchange.
The decision to drop the charges against Flutterwave is also a positive development for other Nigerian financial companies, whose cases have been terminated and whose accounts have been unfrozen. The money belonging to these firms had been frozen by the High Court in a series of financial impropriety suits filed by the ARA from 2020 to last year. Companies whose cases have been terminated include Korapay Technologies Ltd, Kandon Technologies Ltd, RemX Capital Ltd, Avalon Offshore Logistics Ltd, and OIT Africa Limited.
The billions of dollars frozen in Guaranty Trust Bank (GTB), Equity, EcoBank, KCB and Co-operative Bank accounts had been blocked from transfer or withdrawal pending the filing of a petition to have the money forfeited to the government. However, with the charges against Flutterwave being dropped, the company and other affected firms are now set to regain access to their frozen assets.
The withdrawal of charges against Flutterwave and the decision of the Kenyan government to drop the suit is a significant milestone for African fintech. The recovery of frozen assets will allow Flutterwave and other affected companies to continue to grow and provide crucial financial services to businesses operating in Africa. Flutterwave supports thousands of jobs in Kenya, including Uber drivers, food vendors, and others that rely on the payment platform for their daily income.