Nigerian Fintech company, Korapay denies money laundering claims in Kenya, heads to court

Eberechukwu Etike
Korapay says that it is approaching the courts for redress because its name “has been dragged through Kenyan courts on empty, unfounded allegations”…
Kenya court freezes accounts of two other Nigerian firms including Korapay
Kenya court freezes accounts of two other Nigerian firms including Korapay

Nigerian Fintech company, Korapay Technology Limited has denied the accusations of money laundering levied against it by the Kenyan Government. In a statement to Technext, Korapay’s spokesperson and head of marketing, Gbenga Onalaja claimed that the accusations are absolutely untrue and that the company will release a statement to back up its claim.

This follows a report by Kenyan news outlet, The Standard that the High Court froze three bank accounts belonging to it and Kandon Technologies Limited with sums totalling about Sh45 million ($381,065.29) over suspicion of foreign laundering by the Kenyan Asset Recovery Agency (ARA)

Lady Justice Esther Maina, the presiding judge, issued these orders in two separate suits filed by the Asset Recovery Agency. In the first case, Korapay Technologies Ltd’s Equity Bank account was frozen for $249,990 (Sh29.5 million). In the second case against Kandon Technologies Ltd, Sh15 million was frozen in two UBA bank accounts.

“ARA, in its suit against the two companies, argued that they are part of an international ring of fraudsters who have been using Kenyan banks as conduits of illicit money whose source cannot be established”. The Standard reports.

In defence, Korapay said that the amount it has in the frozen account is $250,000 and that the sum was deposited in the account in 2021 in partial fulfilment of conditions for the acquisition of a license to operate as a payment and remittance services provider from the Central Bank of Kenya (CBK).

According to a statement on medium the fintech company said:

As part of the capital requirements from the CBK for obtaining a payment service provider and remittance operator license, Kora deposited the sum of $250,000 in its freshly opened bank account. In line with CBK requirements…

‘Gbenga Onalaja

Read Also: Kenyan authorities Freeze Flutterwave’s accounts over money laundering allegations

A quick check of the Kenyan National Payment System Act contained in the country’s National Payment System Regulations 2014 (Kenya Gazette Supplement No. 119 of August 2014 page 720) indicates the fee and capital required for obtaining a payment service provider license in Kenya below:

It is not clear which of the licenses Korapay had applied for but the company claimed that the deposit was solely for the purpose of the license application and that no other transaction had been carried.

This amount was left untouched pending the granting of our license. Easily verifiable records of this account will show that the $250,000 deposit is the only transaction carried out on that account to date.

-Korapay

On the contrary, the ARA claimed that Korapay has been receiving millions of shillings in their Equity bank accounts and transferring the same funds in small lumps to other accounts.

It claimed that it was a single transaction of $249,990 (Sh29.5 million) that raised suspicion as to the source of the funds.

But the Fintech company has said that it is approaching the courts for redress because its name “has been dragged through Kenyan courts on empty, unfounded allegations of money laundering since May of 2022”.

According to its statement:

As a responsible corporate citizen, we have consistently challenged all these allegations in court and will continue to do so; we have documents that support our position. We are confident that the Kenyan courts will come to see that the accusations against us are not only wholly baseless but borderline malicious.

The recent anti-corruption fight in Kenya seems to be against Nigerian fintech companies.

The ARA also claimed that another Nigerian Fintech company, Kandon received Sh5.5 billion from foreign jurisdictions through their UBA bank account between October 2021 and April this year. But by the end of the investigation, the majority of the funds had been hurriedly transferred out of the account, leaving only Sh15 million.

According to the ARA investigation, these two companies are linked to five other Nigerian firms- including Flutterwave Ltd, Elivalat Fintech Ltd, Hupesi Solutions, Boxtrip Travels and Tours Ltd, Bagtrip Travels Ltd, and Cruz Ride Auto Ltd and Simon Ngige- whose 62 bank accounts are holding funds totalling about Sh6 billion.

These were also recently frozen owing to money laundering allegations.

About Korapay and Kandon

Korapay Technologies

Korapay Technologies Limited was founded in Nigeria in 2018 to help Africans in the diaspora make remittances into Africa, the start-up has since allowed global companies to scale rapidly across the continent. With a single integration, Kora powers businesses to accept pay-ins, and pay-outs and settle across popular payment channels.

“We saw a bigger problem around how money moves within Africa and we have since evolved into a payment infrastructure, allowing both local and global businesses to process payments in and out of Africa,” explained co-founder, Gideon Oghenetega Orowiroro.

Nigerian Fintech company, Korapay denies money laundering claims in Kenya, heads to court
Photo source: Korapy

Korapay received $120,000 pre-seed funding from the seed-stage accelerator, Techstars, Panache Ventures, and other investors. The company is currently operating in 12 states across the United States.

The company was founded in 2017 by Bryan Uyanwune, Gideon Oghenetega Orowiroro and Dickson Chukwuma Nsofor.

Read Also: Flutterwave reacts to money laundering accusations in Kenya, says it has records to verify claims

Kandon Technologies

Kandon Technologies Limited is a fintech startup that uses technology to control cash flow across locations, and currencies particularly for global businesses.

Founded in 2019 by Ayowole Ayodele, Kandon Technologies, formerly known as Fliqpay has received $120,000 in pre-seed funding from seed-stage accelerator, Techstars.

Kenya court freezes accounts of two other Nigerian firms including Kandon Technology
Kenya court freezes accounts of two other Nigerian firms including Kandon Technology

The owners of the company have been listed as two Nigerian nationals, Ayowole Oluwasen Ayodele, the CEO and Uzoamaka Pauline Okoro, the CPO.


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