African fintech Flutterwave is off the hook in Kenya after the high court allowed the country’s Asset Recovery Agency (ARA), an agency that investigates and recovers proceeds of crime, to withdraw the second (and only remaining) case against the payments company.
The case withdrawal brings relief to Flutterwave as it hopes to acquire a payments service provider and remittances 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 into the country.
The ARA has withdrawn the case it filed last year on grounds that further investigations established that Flutterwave was not involved in criminal activities, including money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 earlier ruling on the agency’s request for withdrawal of this suit, the withdrawal is hereby allowed and this suit is marked as withdrawn,” the judge said in his ruling today.
The latest development comes after the judge had, earlier in July, declined the agency’s request to withdraw the case and instructed the agency’s director and the investigating officer (also key witness) to file affidavits detailing reasons behind the withdrawal.
The judge sought to know why the agency claimed to no longer have any evidence of the alleged crime after initially filing a trove of documents, including bank statements, as evidence that the millions in the fintech’s bank and mobile money accounts were proceeds of crime and money laundering.
The agency said it is now satisfied the funds were not proceeds of crime.
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The judge, while delivering the ruling, faulted the agency for filing the case without completing its investigations saying, “it was inappropriate, negligent, reckless and absurd to an investigative agency to commence such serious proceedings without having completed investigations.”
The court further said the withdrawal was on condition that any civil or tortious liabilities that might arise thereafter will not be passed to the Kenyan government or levied on public funds, but will be borne “solely and personally” by the agency’s director and the investigator.
“This is given the negligent, reckless, careless and rash manner in which this case was investigated, and these proceedings were instituted and driven,” he said.
Kenya is now set to release the $3 million it had frozen from access by Flutterwave and its co-accused Adguru and Hupesi solutions.
The initial case was closed in March and $52.5 million released after the ARA formally withdrew it too.
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