Kenya’s ARA drops money laundering case against 3 Nigerian companies

Kenya’s ARA has dropped the legal case against three companies: Avalon Offshore Logistics Limited, OIT Africa Limited, and RemX Capital Limited, all of which were named in an international money laundering syndicate, NTV Kenya reports.

As of the time of writing this report, the reasons for the drop have not been officially revealed. But, there are speculations that the recent move may be the first in a series of backpedalling by the ARA as some of the initial charges were fallouts of a political tussle that trailed the recently concluded elections in Kenya.

According to the ARA, the companies are owned by two Nigerians and two Kenyans who are registered as directors but are serving as proxies for powerful individuals.

ARA also mentioned that the companies’ bank accounts had received credits from numerous suspicious sources before they made rapid withdrawals and transfers to other countries in order to mask the nature and purpose of the cash.

Here is a highlight of the story:

• The High Court in Nairobi, Kenya, issued a withdrawal decision on September 7, 2022, through Honourable Lady Justice E.N Maina. It cited an affidavit filed by an ARA investigator, Fredrick Musyoki, who swore that the agency received information on February 11 that the companies were engaged in international money laundering and that investigation revealed they had received the money from multiple locations.
  
• In April, the agency secured orders freezing the companies’ accounts, preventing them from trading, withdrawing, transferring, or dealing in any way in any earnings or benefits received or accrued from the abovementioned monies.
  
• ARA filed a lawsuit in July accusing the three companies of smuggling more than KSh 25 billion into the country from foreign jurisdictions between October and November 2021. The nature and purpose of the funds remained unknown.
• A network of six firms – OIT Africa, Avalon Offshore Logistics, RemX Capital Ltd, RemX Ltd, RemX Investment Partners and Multigate Ltd – moved Sh25.6 billion from Nigeria to Kenya before wiring some of the funds to countries in Europe and Asia.
• The agency stated it only discovered the illegal transactions when the accounts had a balance of KSh 5.7 billion.
  
• According to ARA, OIT Africa has KSh 4.9 billion in three accounts at Equity Bank and United Bank for Africa (UBA), RemX Capital Limited has KSh 787 million in its UBA dollar account, and Avalon Offshore Logistics Limited has Sh43.5 million in two Equity Bank accounts.

Money came mainly from foreign jurisdictions and when we summoned the directors, they were unable to explain their sources, leading us to believe it was the proceeds of a crime that could be forfeited to the state.

Fredrick Musyoki

Documents filed by the companies earlier seeking to stop the investigations stated that they are an online remittance platform that allows individuals abroad to send money to their loved ones in Nigeria and Kenya.

The back story

Recall that the ARA is looking into a case in which KSh 7 billion was found in 56 accounts in Guaranty Trust Bank (GTB), Equity, EcoBank, KCB, and Co-operative Bank and linked to Flutterwave Payment Technology Limited, Boxtrip Travel and Tours Limited, Bagtrip Travel Limited, Elivalat Fintech Limited, Adguru Technology Limited, Hupesi Solutions, Cruz Ride Auto Limited, and one Simon Ngige.

This means that Flutterwave’s travails in Kenya may continue following a report by Technext that the Kenyan High Court ordered the freezing of another Sh400.6 million ($3.3 million) in three separate bank accounts and some 19 Safaricom M-Pesa pay bill numbers belonging to Flutterwave.

The amounts frozen include Sh110 million in a UBA bank account, another US $ 556,622 (Sh66.7 million), Sh29.1 million in Access Bank and Sh68 million, Sh112 million and Sh14.5 million in a total of 19 Safaricom Paybill numbers.

However, the conversations on social media point to a suggestion that Flutterwave may be walking too, like the three other companies.

This news has been trailed by comments on social media over the weekend. Here are some excerpts:

@ojaoyingbo:
If people understand Kenya Politics very well and how Kenyans generally feel about Nigerians, we will not be very fast to react…the only people that can be expected to act right are the Kenyan citizens. The government is as corrupt as we have here too, and have interests.

@kinjeketile:
It increases my suspicion that Flutterwave wasn’t doing anything wrong. Just lacked a license, and with the Kenyatta administration turning the screws on Ruto’s funders via CBK & KRA, they turned to unorthodox ways of moving money & fundraising.

But, it is not all RED for Nigerian Fintech company, Flutterwave, especially because it has been granted a Switching and Processing License by the Central Bank of Nigeria (CBN), the highest licence given to fintech companies in the country, according to another report by Technext.

Meanwhile, this is not the first time Nigerian companies have been on the scene for money laundering in Kenya. Recall that in 2021, the Supreme Court ordered the accounts of two Nigerian fintech startups (Korapay and Kandon Technologies) to be frozen at more than sh45 million.