African fintech Flutterwave is reeling in Kenya after the high court allowed the Asset Recovery Agency (ARA), an agency that investigates and recovers proceeds of crime, to drop its second (and only) case against the payments company.
The withdrawal of the case brings relief to Flutterwave as it hopes to acquire a payment service provider and remittance license from the Central Bank of Kenya, which flagged it last year for operating without one. It also comes at a time when Flutterwave is ramping up its efforts to expand in the country.
ARA dropped the case it filed last year on the grounds that further investigations showed Flutterwave was not involved in criminal activities, including money laundering and fraud.
“After considering all the facts presented to this court, as well as my previous decision regarding the agency’s request to withdraw this lawsuit, the withdrawal is granted and this lawsuit is marked as withdrawn,” the judge said in his today’s decision.
The latest development comes after the judge earlier in July rejected the agency’s request to withdraw the case and ordered the agency’s director and the investigator (also a key witness) to file affidavits detailing the reasons for the withdrawal.
The judge sought to know why the agency claimed it no longer had evidence of the alleged crime after initially submitting a trove of documents, including bank accounts, as evidence that the millions in fintech bank accounts and mobile money were proceeds of crime and money rinsing.
The agency said it was now satisfied the funds were not the proceeds of crime.
The judge, while handing down the decision, faulted the agency for filing the case without completing its investigations, saying it was “improper, negligent, reckless and unreasonable for an investigative agency to initiate such a serious process without completing its investigations.” .
The court further said that the withdrawal was made on the condition that any civil or tortious actions that may subsequently arise will not be transferred to the Government of Kenya or levied on public funds, but will be borne “solely and personally” by its director and investigator service.
“This is due to the negligent, reckless, careless and hasty manner in which this case was investigated, and these proceedings were instituted and conducted,” he said.
Kenya is now set to release the $3 million it had frozen from access by Flutterwave and co-accused Adguru and Hupesi Solutions.
The original case closed in March and raised $52.5 million after ARA officially withdrew it.
