A Kenyan court has dropped a fraud case against Nigerian fintech firm Korapay Technologies, after the company was linked to online fraud by local authorities.
Korapay specialises in providing digital payment solutions to businesses, and has been operational in Kenya for several years. The firm had been accused of being involved in online fraud, but the court found no evidence to support the claims.
The company has been cleared of any wrongdoing, and will continue to provide its services to businesses in Kenya. This is a positive outcome for Korapay, and also for the Kenyan economy as a whole, as the firm plays an important role in providing digital payment solutions.
Three months after the Kenyan government withdrew a lawsuit against three Nigerian companies accused of being at the centre of an international money laundering syndicate, the companies are now at risk of losing Sh5.7 billion to the state as proceeds of crime. This move comes as a result of the government’s continuing attempts to crack down on money laundering and other financial crimes in the country.
The three companies in question – Avalon Offshore Logistics Limited, OIT Africa Limited and RemX Capital Limited – had been facing a potential forfeiture of their assets totaling Kenyan Shilling 5.7 billion (approximately US$55 million). However, the Kenyan government has now withdrawn its lawsuit against these companies, putting them at risk of losing this money.
According to reports, another company, Kandon Technologies Limited, had its Sh15 million frozen due to allegations of fraud. However, the company was given a reprieve last month after ARA dropped the case. This is just one example of how alleged fraudsters are sometimes able to escape justice.
The State Agency has withdrawn fraud-related cases against five Nigerian fintech companies, the latest being Korapay. All five fintech companies were accused of money laundering and card fraud. However, after further investigation, the State Agency has found no evidence of fraud or money laundering. Therefore, the Agency has withdrawn all cases against the five companies. This is a positive development for the Nigerian fintech industry, which has been marred by allegations of fraud in recent years.
ARA had claimed the Nigerian firms were shell companies incorporated in Kenya for purposes of taking advantage of the liberal financial system to launder funds from foreign jurisdictions whose sources are not legitimate. The firms had no physical presence in Nigeria and were not registered with the Corporate Affairs Commission, according to the London-based watchdog. “The combination of these factors strongly suggests that the firms are shells, and their purpose appears to be money laundering,” ARA said in its report.
The Nigerian Financial Intelligence Unit (NFIU) has claimed that six companies are linked to five other Nigerian entities whose 62 bank accounts totaling Sh6.2 billion were frozen in July 2022 over allegations of card fraud and international money laundering. The NFIU says that the companies are connected to a network of Nigerian and international financial institutions and individuals that are being investigated for their role in financing terrorism and other criminal activities.
The NFIU has asked the Nigerian government to freeze the assets of the six companies and their directors, and is working with Interpol and other international law enforcement agencies to track down and prosecute those responsible for the alleged crimes.
Flutterwave Ltd, Elivalat Fintech Ltd, Hupesi Solutions, Boxtrip Travels and Tours, Bagtrip Travels Ltd and Cruz Ride Auto Ltd are all companies that provide innovative solutions in the financial technology sector. Flutterwave provides a payment platform that allows businesses to accept payments from customers in various African countries. Elivalat Fintech Ltd provides mobile banking and payments solutions for financial institutions in Africa. Hupesi Solutions provides a mobile money platform that allows businesses to send and receive money using their mobile phones. Boxtrip Travels and Tours is a travel company that offers tours to African countries. Bagtrip Travels Ltd is a travel company that offers travel packages to African countries.
The State agency has already filed a notice of withdrawal of the suit lodged against Korapay Technologies Limited. The notice is signed by State counsel Stephen Githinji. It has not explained the reasons for the withdrawal. However, it is understood that the State was not ready to proceed with the case. This is because the main witness in the case, who is a senior official in the State agency, was not available to testify.