Last week, Flutterwave was accused of money laundering in Kenya. Barely a week later, Nigerian-owned fintech Korapay and liquidity management provider Kandon Technologies Limited also received lawsuits for the same accusations and it appears the three cases are connected.
Kenya’s Asset Recovery Agency (ARA) filed two suits against the businesses and the High Court has frozen their accounts on the suspicion that they brought over $50 million (KES6 billion) into Kenya as part of a money laundering scheme.
Lady Justice Esther Maina froze $249,990 (KES 29.5 million) held in Korapay’s Equity Bank account while Kandon Technologies had $126,800 (KES 15 million) in two UBA accounts frozen by Justice Maina.
Korapay and Kandon Technologies Limited are being accused of card fraud and international money laundering.
ARA says the two companies are part of an international ring of fraudsters using Kenyan banks to receive money from an untraceable foreign source. Allegedly, the money is usually transferred immediately to other accounts to avoid being traced.
Their activities came under suspicion when an account received $249,990 (KES 29.5 million) in a single transaction. Investigations by Kenyan authorities reveal that between October 2021 and April this year, the bank accounts had cumulatively handled US$46.47 million (KES 5.5 billion).
ARA says it has verified that the companies were established in Kenya to utilise the country’s liberal financial system to launder funds. So far, investigations have linked both companies to a Kenyan businessman—Simon Karanja— whose bank accounts were also frozen.
Five other Nigerian firms are involved in this legal trouble and some are Nigerian— Boxtrip Travels and Tours, Bagtrip Travels Ltd, and Flutterwave Ltd. Flutterwave, Korapay Technologies and Kandon Technologies have released statements saying that the claims are false.
The claims have not been substantiated, but we can’t help but wonder how these will affect Nigerian startups operating in Kenya, which company account will be frozen next?