Flutterwave in Trouble? Court Freezes 45 Bank Accounts

Flutterwave, a fintech unicorn spearheaded by Gbenga Agboola, a prominent Nigerian tech billionaire with headquarters in San Francisco and Lagos, is currently embroiled in yet another legal dispute. This time, a Nairobi court has issued an order to freeze 45 bank accounts and ten mobile money wallets owned by the company.

This latest legal action further compounds the accusations of money laundering leveled against the fintech technology firm, as numerous individuals and businesses are pursuing avenues to access the allegedly billions hidden in local banks, intensifying the scrutiny faced by the firm.

Last week, High Court Judge Alfred Mabeya granted a freezing order in response to a lawsuit initiated by a collective of 2,468 Nigerian individuals. These claimants allege that Flutterwave deceived them out of Ksh1.6 billion ($12.04 million).

The lawsuit identifies six financial institutions, namely United Bank of Africa, Access Bank, Guaranty Trust Bank, Equity Bank, Ecobank, and Safaricom, as involved parties responsible for holding Flutterwave’s funds.

Flutterwave is entangled in yet another dispute, this time with Hong Kong’s Lae Technologies. The latter has filed a lawsuit against Flutterwave and its seven subsidiaries, alleging breach of contract. Lae Technologies is pursuing a minimum compensation of $88 million and has petitioned the Nairobi court to freeze multiple bank accounts associated with Flutterwave and its affiliated entities.

The Hong Kong-based company claims that the frozen accounts hold a significantly higher value than the compensation amount they are seeking.

What you should know about Flutterwave

Founded in 2016 by Gbenga Agboola and Iyinoluwa Aboyeji, Flutterwave has established itself as Africa’s leading tech startup, boasting considerable value. In 2022, the company achieved a significant milestone by securing $250 million in its Series D funding round, propelling its valuation to over $3 billion. This accomplishment further solidifies Gbenga Agboola’s prominent status within the African fintech sector.

Flutterwave has emerged as a pioneering force in propelling innovation and facilitating technological progress in Africa and emerging markets. However, the company has recently faced allegations of financial impropriety, encompassing activities such as money laundering, insider trading, fraud, and perjury. These accusations have cast a cloud of uncertainty over the company’s reputation.

Flutterwave’s incessant challenges

In a development earlier this year, the Kenyan High Court took action to freeze $52.5 million dispersed among 62 bank accounts belonging to Flutterwave. The freezing of these accounts was based on suspicions of the funds being derived from card fraud and money laundering activities.

Despite the hurdles faced, Flutterwave remains steadfast in its dedication to protecting client funds. Earlier this year, the company promptly dismissed media reports suggesting a breach that resulted in the loss of N2.9 billion ($6.3 million) from its accounts. Flutterwave strongly refuted these claims, emphasizing its commitment to maintaining the security and integrity of its financial operations.

As Flutterwave grapples with these legal challenges, the path forward for the company and its ability to surmount these obstacles while staying true to its mission of creating boundless opportunities for customers and businesses in Africa and developing markets remains to be seen.