Kenya clears Kandon, a Nigerian tech firm of money laundering allegations brought against it by the Directorate of Criminal Investigations and Kenya's Asset Recovery Agency (ARA) (DCI). It has been exonerated of charges of money laundering and credit card fraud brought against it by Kenyan authorities earlier in July.
Bank account freeze on Kandon and Kora Pay, two additional Nigerian fintech companies, while it conducted an investigation. Both businesses are accused of smuggling $51 million, or Sh6 million, into the nation of East Africa.
Asset Recovery Agency (ARA), the nation's anti-money laundering organization, asked the Kenyan High Court in July to impose a temporary
freeze on the company's accounts while the investigation was ongoing after the company, along with Kora Pay, was accused of acting as a conduit for international money laundering in Kenya. Kandon Technologies's two accounts, totalling $126,841 in value, were frozen.
Read also: Kenya Asset Recovery Agency (ARA) Drops Money Laundering Charges Against Nigerian Companies
Money Laundry Allegations
When the ARA charged the fintech company with money laundering, it said that it had seen transactions that raised suspicion.“We established that they received the Sh29.5 million in a single transaction which raised suspicion as to the source of the funds,” the agency explains.
Similar fintech businesses with Nigerian founders that tried to do business in Kenya were also charged with money laundering by the ARA. After being accused earlier this year, Flutterwave and ChipperCash had their accounts in the nation suspended.
The business for liquidity management, which Ayowole Ayodele created in 2019, is accused of acting as a conduit for actions related to international money laundering. The ARA connected Kandon Technologies with seven other Nigerian companies—Flutterwave Ltd, Elivalat Fintech Ltd, Hupesi Solutions, Adguru Technology Limited, Boxtrip Travels and Tours, Bagtrip Travels Ltd, Cruz Ride Auto Ltd; and a Kenyan businessman, Simon Karanja—whose 56 bank accounts totalling more than $59.2 million (Sh6 billion) in total value were frozen in July due to allegations of a similar nature. The money in Kandon's two UBA accounts, valued at $126,841 (Sh15 million), and the money in Kora Pay's Equity Bank account, worth $249,565 (Sh29.5 million), were both frozen by the court.
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ARA Frees Kandon
"We are happy that all the authorities have cleared us, and I appreciate how fair and thorough they were in their inquiries. We must get back to work if we are to continue meeting the demands of our partners."
Ayodele Ayowole, CEO, Explains.
"The Director of Criminal Investigations at the National Police Service in Nairobi, Kenya, Mike Muia, stated Founder kandon, in a letter dated October 11, 2022, that allegations of money laundering against Kandon could not be proven."
"As a follow-up to a letter dated August 11th, 2022, in which we updated you on the status of our department's inquiries into claims of card fraud and money laundering. Please take note that the investigation is now complete. I can report that Kandon Technology Limited was not found guilty of the charges of card fraud and money laundering. Please consider this communication to be the last one."
The preservation order protecting Kandon from being assessed for its frozen accounts was deemed to have expired in a High Court order dated November 11, 2022, and "this file is hereby closed."
Justice Esther Maina made the rulings in two separate lawsuits brought by the ARA against Kandon Technologies Limited over allegations that criminals are utilizing them as international money laundering conduits.
The account of Kandon Technologies is unfrozen by ARA.
In a letter to UBA, ARA stated that it did not wish to pursue the issue and requested that the accounts of Kandon Technologies be unfrozen. The letter, which is dated October 27, states, "The Agency has concluded its investigations."
