Court freezes Flutterwave’s 45 bank accounts over money laundering charges

A Nairobi court has frozen 45 bank accounts and 10 mobile money wallets belonging to a Nigerian-owned financial technology firm battling multiple money laundering allegations, as scorned individuals and companies begin to queue up for billions the firm has stashed away in local banks.

High Court judge Alfred Mabeya last week issued orders freezing the accounts of Flutterwave Payments Technology after a group of 2,468 Nigerian nationals claimed the firm was used to defraud them of $12.04 million (Sh1.6 billion).

The Nigerian nationals have sued Flutterwave, naming six financial institutions that hold the company’s funds as interested parties.

The institutions include five banks — United Bank of Africa, Access Bank, Guaranty Trust Bank, Equity Bank, and Ecobank — and Safaricom, where Flutterwave operates 10 paybill numbers.

“The application is certified as urgent… The application will be served for directions on 21.6.2023. In the meantime, prayers 2-9 [seeking freezing of bank accounts, bank keys and mobile money wallets] are granted for 14 days only,” Justice Mabeya ruled.

Flutterwave has appointed Mahmoud Gitau Jillo Advocates to represent it in the case.

While the court papers do not specify how much money is in the bank accounts and mobile money wallets, the Nigerians in the lawsuit believe the amounts run into billions.

In another dispute, Hong Kong’s Lae Technologies has sued Flutterwave and seven subsidiaries for alleged breach of contract and wants the Nairobi court to freeze several bank accounts in anticipation of receiving at least $88 million (Sh12.2 billion) in compensation.

Lae Technologies says in court papers that bank accounts belonging to Flutterwave and its affiliates contain much more than the Sh12.2 billion the Hong Kong company is seeking.

In 2022, the Assets Recovery Agency (ARA) successfully sought freezing orders against Flutterwave and eight other Nigerian companies whose bank accounts held Sh6.2 billion.

At the time, the ARA was investigating the companies for alleged money laundering, suspecting that they were moving the proceeds of credit card fraud.

The companies are RemX Capital Ltd, Pumicells Ltd, OIT Africa Ltd, Multigate Ltd, RemX Investment Partners Ltd, Avalon Offshore Logistics Ltd and Kandon Technologies Ltd.

However, in February 2023, the ARA withdrew its case against the companies, giving them access to the billions.

Flutterwave Payments Technology Ltd is a Kenyan subsidiary of US-based Flutterwave Inc.

It is registered in California as a payment technology and infrastructure provider. But its main operations are in at least 10 African countries, including Kenya and Nigeria.

Business Registration Service records show that Flutterwave Payments Technology is owned by California-registered Flutterwave Inc (247,000 shares) and Olugbenga Agboola (3,000 shares).

Mr Agboola is the chief executive officer of Flutterwave Inc. He co-founded the company in 2016 with Iyinoluwa Aboyeji and Adeleke Adekoya.

According to court documents, the petitioners pumped money into a sports betting platform, registered as 86 Football Technology Ltd, in an attempt to profit from their country’s vibrant gambling industry.

The betting company is also referred to in court papers as 86W, 86FB and 86Z.

The company is accused of duping gullible punters into believing that it used complex scientific formulae to calculate potential football outcomes.

It also claimed to have close links with the City Football Group, which controls several clubs including English Premier League champions Manchester City.

But the betting firm turned out to be a massive Ponzi scheme.

Several Nigerian media outlets reported in 2022 that the pyramid scheme had taken more than $400 million (Sh55 billion) from Nigerians.

86 Football Technology is alleged to have moved billions of its loot through Flutterwave.

On June 7, 2023, Justice Mabeya ordered the 2,468 Ponzi scheme victims to serve Flutterwave Payment Solutions and the six institutions holding their funds with the court papers.

The parties will appear before Justice Mabeya on June 21 for further directions on how to proceed with the case. The judge will also decide whether to extend the freezing orders.

Morris Ebitimi Joseph led the Nigerian victims in joining the ARA case last year. When the ARA case was withdrawn, the victims’ claim died with it.

The same group has also filed another case in Nigeria seeking to recover their money.

Mr Joseph says the bank accounts and mobile money wallets are among the Flutterwave assets that have been traced.