Flutterwave, an African financial unicorn, couldn’t break a contract, according to Kenyan High Court Judge Nixon Sifuna.
The Fintech accounts will be frozen and Flutterwave may wait longer for nationwide licensing.
The company is in trouble without a license. The Kenyan Asset Recovery Agency (ARA) charged Hupesi Solutions and Adguru Technology Limited with fraud and money laundering. Three $3.3 million bank accounts and 19 M-Pesa paybill numbers were suspended.
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A Kenyan Court freezes Flutterwave funding
The High Court has blocked access to the $52.5 million accounts of 62 firms, including Flutterwave and six others. ARA dropped the case and lost the money.
Judge Sifuna denied the ARA’s second Flutterwave case closure request because the government agency didn’t explain why. The judge ruled that government agencies like the ARA must never deceive Kenyan taxpayers. He also criticized recovery institutions for suing companies and dumping them.
Judge Sifuna concluded the ARA had enough evidence to prove Flutterwave did something wrong. The government called the fintech’s millions in bank accounts and M-Pesa paybill accounts “proceeds of crime and money laundering.” Corporal Isaac Natikare, the ARA’s investigator, said in an affidavit that he had proof.
Judge Sifuna wondered what happened to the proof. What about the proof that Corporal Natikare said he had gathered over time in his Affidavit, which he signed under oath and which is in five volumes on the Court file?”
Judge Sifuna threw out the case by citing the Kenyan Constitution. He said that the agreement needs companies and people to protect their wealth and tell where it came from.
How this affects Flutterwave
After the decision, Flutterwave’s case will not only take longer, but the unicorn’s plan to get a license to work in Kenya will also be slowed down. This comes after the company said three months ago that it planned to open an office in the East African country.
And since the court turned down ARA’s request to drop the case, it’s important to ask how that will affect its reputation. Remember that Flutterwave works in places like Egypt, Nigeria, and Rwanda.
The ARA’s move to drop the second case raises a very important question about how honest it is. Why try to close a case after saying there was enough proof to keep going with it?