Nigerian-Owned Tech Firm, Flutterwave, Closes 45 Bank Accounts Due to Money Laundering

A group of 2,468 Nigerian nationals accused Flutterwave Payments Technology of defrauding them of $12.04 million (Sh1.6 billion). 

As scorned individuals and companies began to queue up for billions stashed away in local banks by a Nigerian-owned financial technology firm, in response to multiple allegations of money laundering, the Nairobi court has frozen 45 bank accounts and 10 mobile money wallets belonging to the firm. The firm was accused of defrauding 2,468 Nigerian citizens of $12.04 million (Sh1.6 billion), High Court judge, Alfred Mabeya, froze the accounts of Flutterwave Payments Technology.

A Nigerian national has filed a lawsuit against Flutterwave, alleging that six lenders who hold the company’s funds are involved in a defrauding case. Flutterwave operates 10 pay bill numbers for Safaricom along with five banks — Access Bank, United Bank of Africa, Guaranty Trust Bank, Ecobank, and Equity Bank.

“The application is certified as urgent… The application will be served with 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.

The firm of Mahmoud Gitau Jillo Advocates has been appointed as the representative of Flutterwave. Although the court documents do not specify the amount of money in the accounts and mobile money wallets, those who filed the lawsuit believe it is in the billions of dollars. As a result of the latest litigation, pressure is mounting on the technology company seeking a licence from the Central Bank of Kenya (CBK).

Hong Kong’s Lae Technologies has filed a separate lawsuit against RemX Ltd, which is suspected of having ties to the payments company. There are seven other companies listed as interested parties, including Flutterwave. According to the lawsuit, RemX owes at least $88 million (Sh12.2 billion) that Lae wants the High Court in Nairobi to freeze.

ARA (Assets Recovery Agency) successfully froze the bank accounts of eight Nigerian companies, including Flutterwave, in 2022. It was in 2022 that the Assets Recovery Agency (ARA) successfully froze the bank accounts of Flutterwave and eight other Nigerian companies, holding Sh6.2 billion.

As a subsidiary of Flutterwave Inc., Flutterwave Payments Technology Ltd is based in Nairobi, Kenya. A payment technology and infrastructure provider registered in California provides various payment services. Kenya and Nigeria are among the company’s most important markets in Africa. The California-registered Flutterwave Inc. owns 247,000 shares of Flutterwave Payments Technology and 3,000 shares held by Olugbenga Agboola.

Flutterwave Inc is headed by Mr Agboola as its chief executive officer. Adeleke Adekoya and Iyinoluwa Aboyeji co-founded the company in 2016. The petitioners invested money in 86 Football Technology Ltd, a sports betting platform registered in their country, to benefit from the thriving gambling industry in their country. 

86W, 86FB, and 86Z are also references to Football Technology Ltd in court documents. There are allegations that the company deceived gullible punters by claiming to calculate football outcomes using complex scientific formulas. It was also claimed to have close ties with the City Football Group, which owns many clubs, including Manchester City, one of the top clubs in the English Premier League. The betting firm was a Ponzi scheme of enormous proportions.

Multiple Nigerian news outlets reported in 2022 that more than $400 million (Sh55 billion) was syphoned off from Nigerian citizens through the pyramid scheme. Flutterwave was said to have processed billions of dollars for 86 Football Technology. On June 7, 2023, a district court ruled that 2,468 victims of the Ponzi scheme must file court documents against Flutterwave Payment Solutions and six other organisations that hold their funds.

Regardless of how the case is handled, the parties must appear before Justice Mabeya on June 21st. The judge will also decide whether the freezing orders will be extended. Nigerian victims were led by Morris Ebitimi Joseph last year to join the ARA case. The victims’ claim was withdrawn when the ARA case was withdrawn. Another lawsuit has also been filed by the same group in Nigeria, seeking the recovery of their funds. Several Flutterwave assets have been traced, including bank accounts and mobile wallets.

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