The Kenyan high court has granted permission for the country’s Asset Recovery Agency (ARA) to withdraw the only remaining case against African fintech company, Flutterwave.
According to a TechCrunch report, the move follows a legal battle involving allegations of money laundering and fraud against Flutterwave, resulting in the freezing of $3 million last year.
Last August, Flutterwave, along with other entities, faced a major setback as $52.5 million was frozen by the Kenyan court, leading to a series of legal challenges filed by the Assets Recovery Agency (ARA).
The recent withdrawal of the second case is a relief for Flutterwave, as it actively pursues a payments service provider and remittances license from the Central Bank of Kenya, which had flagged the company for operating without one.
The ARA’s decision to withdraw the case follows a thorough reevaluation, with investigations revealing that Flutterwave was not involved in any criminal activities, including money laundering and fraud. The court’s ruling to allow the withdrawal was based on the agency’s acknowledgment that the funds in question were not proceeds of crime.
This turn of events comes after a prior refusal by the judge in July to allow the case withdrawal. At that time, the judge demanded detailed affidavits from the ARA’s director and investigating officer, questioning the sudden lack of evidence after the agency had initially presented extensive documentation, including bank statements.
In a scathing rebuke, the judge criticized the ARA for initiating proceedings without completing its investigations, deeming it “inappropriate, negligent, reckless, and absurd.” The withdrawal, however, is conditional, ensuring that any future civil or tortious liabilities resulting from the case will not burden the Kenyan government or public funds. Instead, the responsibility will rest “solely and personally” on the ARA’s director and investigator.
As a consequence of this legal resolution, Kenya is set to release the frozen $3 million to Flutterwave, along with co-accused entities Adguru and Hupesi Solutions. The closure of the initial case in March saw the release of $52.5 million after the ARA formally withdrew its allegations.
Flutterwave’s exoneration comes at a juncture where the company intensifies its efforts to expand its operations within Kenya’s financial landscape.
