Nigerian fintech giant, Flutterwave, has been granted reprieve in Kenya after the country’s high court permitted the Asset Recovery Agency (ARA) to withdraw a money laundering and fraud case against the payments company.
The ARA, tasked with investigating and recovering proceeds of crime, initiated the case in August 2022, freezing $3 million linked to Flutterwave, as well as Hupesi Solutions and Adguru Technology Limited.
The ARA withdrew the case on the grounds that further investigations revealed that Flutterwave was uninvolved in criminal activities such as money laundering and fraud. The judge, in his ruling, stated, “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on the agency’s request for withdrawal of this suit, the withdrawal is hereby allowed, and this suit is marked as withdrawn.”
This outcome follows a previous ruling in July where the judge had declined the ARA’s request to withdraw the case and had sought detailed affidavits from the agency’s director and the investigating officer, who was also a key witness, explaining the reasons behind the withdrawal.
The judge expressed dissatisfaction with the agency for filing the case without completing its investigations, deeming it “inappropriate, negligent, reckless, and absurd,” for the investigative body to commence such serious proceedings without concluding its inquiries and being sure.
While Flutterwave has gained relief from the legal battle, the court has imposed conditions on the withdrawal. Any civil or tortious liabilities arising thereafter will not be passed to the Kenyan government or public funds but will be borne “solely and personally” by the ARA’s director and the investigator. This decision is based on the court’s criticism of the “negligent, reckless, careless, and rash manner” in which the case was investigated and instituted.
With this resolution, Kenya is set to release the frozen $3 million, which could aid in Flutterwave’s expansion efforts in the East African market. The fintech’s commitment to regulatory compliance and its push for financial services in the region remain pivotal aspects of its strategic objectives.
Flutterwave is currently pursuing a payments service provider and remittances license from the Central Bank of Kenya, which flagged Fthe fintech last year for operating without the required licenses.