Court freezes Flutterwave’s 45 bank accounts in betting fraud claim

Olugbenga Agboola, co-founder and CEO of Flutterwave

Olugbenga Agboola, co-founder and CEO of Flutterwave.

Photo credit: Pool

The High Court has frozen 45 bank accounts and 10 mobile money wallets belonging to a Nigerian-owned financial technology firm battling money laundering allegations.

Justice Alfred Mabeya last week issued orders freezing the accounts of Flutterwave Payments Technology Ltd after a group of 2,468 Nigerians claimed the firm was used to defraud them of $12.04 million (Sh1.6 billion).

The Nigerian nationals have sued Flutterwave and named six financial institutions that hold the company’s funds as interested parties. The institutions include five banks—United Bank of Africa, Access Bank, Guaranty Trust Bank, Equity Bank and Ecobank—and Safaricom, where Flutterwave operates 10 paybill numbers.

“The application is certified as urgent... the application will be served for directions on June 21. In the meantime, prayers two to nine (seeking freezing of bank accounts, bank keys and mobile money wallets) are granted for 14 days only,” Justice Mabeya ruled.

Flutterwave has appointed Mahmoud Gitau Jillo Advocates to represent it in the case.

While the court papers do not specify how much money is in the bank accounts and mobile money wallets, the Nigerians, who are seeking Sh1.6 billion, are confident they have billions.

Breach of contract

In another dispute, Hong Kong’s Lae Technologies has sued Flutterwave and seven subsidiaries for alleged breach of contract and wants the Nairobi High Court to freeze several bank accounts in anticipation of receiving at least $88 million (Sh12.2 billion) in compensation.

Lae Technologies says in its court papers that bank accounts belonging to Flutterwave and its affiliates contain much more than the Sh12.2 billion the Hong Kong company is seeking.

In 2022, the Assets Recovery Agency (ARA) successfully sought freeze orders against Flutterwave and eight other Nigerian companies whose bank accounts held Sh6.2 billion.

At the time, ARA was investigating the companies for alleged money laundering, suspecting that they were moving the proceeds of credit card fraud. The companies are RemX Capital Ltd, Pumicells Ltd, OIT Africa Ltd, Multigate Ltd, RemX Investment Partners Ltd, Avalon Offshore Logistics Ltd and Kandon Technologies Ltd.

However, in February this year, ARA withdrew its case against the companies, giving them access to the billions.

Flutterwave Payments Technology Ltd is a Kenyan subsidiary of US-based Flutterwave Inc. It is registered in California as a payment technology and infrastructure provider, but its main operations are in at least 10 African countries, including Kenya and Nigeria.

Business Registration Service records show that Flutterwave Payments Technology is owned by Flutterwave Inc (247,000 shares) and Olugbenga Agboola (3,000 shares). Mr Agboola is the Chief Executive Officer of Flutterwave Inc. He co-founded the company in 2016 with Iyinoluwa Aboyeji and Adeleke Adekoya.

According to court documents, the Nigerian petitioners' pumped money into a sports betting platform, registered as 86 Football Technology Ltd, in an attempt to profit from their country’s vibrant gambling industry. The betting company is also referred to in court papers as 86W, 86FB and 86Z.

The company duped gullible punters into believing that it used complex scientific formula to calculate potential football outcomes. It also claimed to have close links with the City Football Group, which controls several clubs including English Premier League champions Manchester City.

Ponzi scheme

But the betting firm turned out to be a massive Ponzi scheme. Several Nigerian media outlets reported in 2022 that the pyramid scheme had taken more than $400 million (Sh55 billion) from Nigerians.

86 Football Technology is alleged to have moved billions of its loot through Flutterwave, which some of the victims have now taken over in search of compensation.

On June 7, Justice Mabeya ordered the 2,468 Ponzi scheme victims to serve Flutterwave Payment Solutions and the six institutions holding their funds with the court papers. The parties will appear before him on June 21 for further directions. The judge will also decide whether to extend the freezing orders.

Morris Ebitimi Joseph led the Nigerian victims in joining the ARA case last year. When the ARA case was withdrawn, the victims’ claim died with it. The same group has also filed another case in Nigeria to recover their money.

Mr Joseph says the bank accounts and mobile money wallets are among the Flutterwave assets that have been traced.