A Kenyan court has frozen 45 bank accounts and 10 mobile money wallets that belong to a Nigerian-owned financial technology firm, Flutterwave over allegations of a betting scam.
After hearing allegations from 2,468 Nigerian nationals that Flutterwave Payments Technology was used to defraud them of $12.04 million (Sh1.6 billion), High Court judge Alfred Mabeya last week issued orders blocking the company’s accounts.
Six regional lenders who are in possession of the company’s funds are named as interested parties in the Nigerian nationals’ lawsuit against Flutterwave.
The organisations include Safaricom, where Flutterwave manages 10 paybill numbers, and five banks: United Bank of Africa, Access Bank, Guaranty Trust Bank, Equity Bank, and Ecobank.
“The application is certified as urgent… The application will be served for directions on 21.6.2023. In the meantime, prayers 2-9 [seeking freezing of bank accounts, bank keys and mobile money wallets] are granted for 14 days only,” Justice Mabeya ruled.
Mahmoud Gitau Jillo Advocates has been chosen by Flutterwave to act as its legal counsel in this matter.
Although the amount of money in the bank accounts and mobile money wallets is not specified in the court documents, the Nigerians involved in the action estimate it to be in the billions.
Flutterwave and seven other businesses have been named as interested parties in a separate lawsuit filed by Hong Kong’s Lae Technologies against RemX Ltd, which is thought to have connections to the payments company. The lawsuit alleges a breach of contract.
Lae claims that RemX owes it at least $88 million (Sh12.2 billion), and is seeking to have multiple bank accounts frozen by the High Court of Nairobi.
The Assets Recovery Agency was successful in 2022 in obtaining freezing orders against Flutterwave and eight other Nigerian businesses with Sh6.2 billion in bank accounts.
At the time, ARA was looking into the businesses for possible money laundering because it believed they were shifting criminal proceeds and using credit card fraud.
However, the ARA dropped its lawsuit against the businesses in February 2023, allowing them to access the billions.
The US-based company Flutterwave has a subsidiary in Kenya called Flutterwave Payments Technology Ltd.
In an effort to benefit from their nation’s thriving gambling sector, the petitioners allegedly invested money in a sports betting platform known as 86 Football Technology Ltd.
The business is accused of misleading naive bettors into thinking it used sophisticated scientific equations to predict possible sports outcomes.
Additionally, it stated that it was closely associated with the City Football Group, which owns a number of clubs, including Manchester City, the reigning English Premier League winner, but it turned out that the betting company was a large Ponzi scheme.
In 2022, some Nigerian media sites stated that the pyramid scheme had defrauded Nigerians out of more than $400 million (Sh55 billion).
It is claimed that 86 Football Technology used Flutterwave to transfer billions of its wealth.
Justice Mabeya issued an order on June 7, 2023, directing the 2,468 victims of Ponzi schemes to deliver court papers to Flutterwave Payment Solutions and the six institutions holding their money.
Bank accounts and mobile money wallets, according to Mr. Joseph, are among the Flutterwave assets that have been located.