Flutterwave plans Nasdaq listing amid money laundering claims

By Monica MUEMA and Business Daily

Africa’s largest startup Flutterwave will proceed with its Nasdaq Stock Market listing in the United States despite rising card fraud and money laundering charges levelled against the Nigerian financial technology firm in Kenya.

The firm is also battling regulatory hurdles across the African Continent.

The unicorn’s planned listing is expected to raise funds for expansion in existing markets and new ones on the continent.  It is also understood that Fluttewave will start lending with the introduction of collateral-free digital loans to businesses, according to Bloomberg which reported the story on Tuesday.

Interestingly, the fintech is not licensed to operate in Kenya despite the East African largest economy being its second-largest market after Nigeria.

“It has come to the attention of the Central Bank of Kenya (CBK) that Flutterwave Payments Technology Ltd and Chipper Technologies Ltd have been engaging in the money remittance business without licensing and authorization by CBK,” the letter said.

On Monday, the High Court gave new orders to freeze another Sh400.6 million in three bank accounts and 19 Safaricom M-Pesa pay bill numbers over alleged links to fraud.

In July, court froze more than Sh6.2 billion spread in 62 bank accounts belonging to the payment settlement firm and four Kenyans on fears they are proceeds of crime.

The billions in Guaranty Trust Bank (GTB), Equity, Ecobank, KCB and Co-operative Bank accounts were frozen after the Assets Recovery Agency (ARA) applied to block the transfer or withdrawal, pending the filing of a petition to have the money forfeited to the government.

The agency said in court filings that their investigations revealed the cash was wired in the guise of payments for goods and services.

The firm is valued at Sh360.2 billion and is yet to respond legally to those allegations.

The Nigerian financial-technology company recently filled key positions including a chief financial officer as it prepares for an initial public offering potentially next year, people familiar with the matter said, requesting not to be identified because it’s private. It might, however, take longer as the company deals with a reputation crisis and amid a global market downturn, they said as reported by Bloomberg.

The business took a direct hit last month, when the Kenyan High Court froze Flutterwave’s bank accounts under anti-money laundering rules and the central bank said it isn’t licensed to operate payments services in the country.

The company has for months been struggling with allegations in the media and lawsuits, including claims of refusing former employees stock rights, harassment and bullying.

Flutterwave denied accusations of financial misconduct, including claims of money laundering in Kenya and irregularities related to stock options, and said it has taken action against those found culpable for any form of harassment in the company. It said the IPO plan is subject to market conditions.

It’s a blow for Flutterwave and its co-founder and Chief Executive Officer Olugbenga Agboola, who tripled the company’s valuation to $3 billion within a year after attracting investments from venture capital firms including B Capital Group and Tiger Global Management LLC. His stake in Flutterwave is worth more than $370 million as of the company’s January funding round, according to an analysis by the Bloomberg Billionaires Index using Pitchbook data.