Flutterwave, Africa's most valuable startup, has successfully navigated its last legal obstacle in Kenya. On Thursday (Nov. 9, 2023), a Kenyan high court approved the withdrawal of a money laundering case initiated by the country's Asset Recovery Agency (ARA), responsible for investigating and recovering proceeds of crime.
"After considering all the facts presented to this court, as well as my earlier ruling on the agency’s request for withdrawal of this suit, the withdrawal is hereby allowed and this suit is marked as withdrawn," Judge Nixon Sifuna said, as reported by TechCrunch.
In July, the court rejected the agency's plea to dismiss the case and directed the agency's director and the investigating officer to submit affidavits stating the reasons for seeking withdrawal. The judge inquired about the agency's change in stance, questioning why, despite initially submitting an extensive array of documents, such as bank statements, as evidence to assert that the millions in the fintech's bank and mobile money accounts were linked to crime and money laundering, the agency now asserted a lack of evidence.
ARA maintains that it is now convinced the funds were not obtained through illegal activities. "It was inappropriate, negligent, reckless and absurd to an investigative agency to commence such serious proceedings without having completed investigations," Sifuna said during the ruling on Thursday.
Flutterwave has not yet provided a statement regarding the recent development. Nevertheless, when the allegations initially arose, the fintech stated, "Claims of financial improprieties involving the company in Kenya are entirely false, and we have the records to verify this."
In August last year, ARA froze $3 million belonging to Flutterwave, Hupesi Solutions, and Adguru Technology Limited, citing suspicions of money laundering and fraud. This action occurred two months after the agency had previously frozen another $52.5 million, including funds linked to Flutterwave and six other companies. After each seizure, the ARA filed a lawsuit, and the first case was formally withdrawn earlier this year.
The end of the Kenyan storm?
Just last month, Flutterwave declared its intention to invest $50 million in Kenya as a pivotal step in its East African market expansion. The fintech has also obtained name approval from the Central Bank of Kenya, the same regulatory body that levelled accusations of illegal operations against Flutterwave in the country last year.
Flutterwave is also in the process of securing essential licences, including a payments service provider licence and a remittance licence in Kenya. These licences will enable the company to facilitate electronic funds transfers, money deposits, and withdrawals, enhancing its financial services offerings.
"There is a lot to do in Kenya. We are happy we are going through the process of approval. We didn’t chicken out. We stayed the course even when everything stopped. The current administration is very supportive," Agboola said.
Last year when its challenges in the Kenyan market started Agboola told Peoples Gazette it was politically motivated. "Why are Nigerian companies in Kenya being targeted by Kenya ARA? This is happening near their election time," he said.
"If Ruto wins the Kenyan election which is looking likely, the court case against a certain Fintech company will coincidentally disappear from the priority list or get quietly dropped altogether," David Hundeyin, a Nigerian journalist, alleged in August 2022 citing the aforementioned relationship.
As the turbulence settles, the fintech company is ready to strengthen its foothold in the market it entered in 2016 through a strategic partnership with Kenya's KCB Bank, headquartered in Nairobi.
In October, Flutterwave brought on board Leon Kiptum, the former country manager at Chipper Cash, appointing him as Senior Vice President for East Africa. Additionally, Saruni Maina, previously a Chipper Merchant Business Executive, joined as the Associate Vice President (AVP) of Stablecoins. This move was complemented by the inclusion of other seasoned former tech executives from Wasoko and Telkom Kenya.
"We [...] scaling the team here with Leon Kiptum in Kenya. We are scaling the company and bringing the right people on board, and we are doing everything to scale and grow," Agboola said in a recent interview.