The Nigerian tech company, Kandon Technologies, has been cleared of money laundering and card fraud allegations laid against it by Kenyan anti-money laundering agency Asset Recovery Agency (ARA), earlier in July, according to documents seen by Technext.
The ARA linked Kandon Technologies (founded by Ayowole Ayodele in 2019 and backed by Techstars) to seven other Nigerian companies: Flutterwave Ltd, Elivalat Fintech Ltd, Hupesi Solutions, Adguru Technology Limited, Boxtrip Travels and Tours, Bagtrip Travels Ltd, Cruz Ride Auto Ltd; and a Kenyan businessman, Simon Karanj.
The court then froze funds worth $126,841 (Sh15 million) and $249,565 (Sh29.5 million). found in Kandon’s two UBA accounts
ARA, in its suit against the two companies, argued that they are part of an international ring of fraudsters using Kenyan banks as conduits of illicit money whose source cannot be established.
In the case against Kandon Technologies Ltd, ARA claimed that the company siphoned Sh5.5 billion, which was transacted through their bank account at UBA in seven months between October 2021 and April 2022.
“Our investigations revealed that their account had transacted Sh5.5 billion in seven months and by the time we got intelligence information that they were engaged in money laundering, they had transferred the funds to other jurisdictions with only Sh15 million remaining,” said ARA.
ARA claimed to have established that the Nigerian firms are shell companies incorporated in Kenya to take advantage of the liberal financial system to launder funds whose sources are not legitimate.
Kandon denied the allegations of financial impropriety and argued that the company was compliant with Kenyan laws, and expressed plans to head to court.
Every transaction we did in Kenya was fully compliant, we’re working directly with the banks who have carried out KYC on us and are aware of the nature of our transactions and our beneficiaries.A Kandon representative said.
“We have always maintained that we have done nothing wrong. As a liquidity management startup offering treasury solutions, and alternative trading we always facilitate transactions for many of our partners doing legitimate business through licensed commercial banks in Kenya. We have records of these transactions, which are available and can be verified,” CEO of Kandon Technologies Ayodele Ayowole said.
ARA clears Kandon
In a letter seen by Technext, dated October 11, 2022, the Director of Criminal Investigations at the National Police Service, Nairobi, Kenya, Mike Muia, said allegations of money laundering against Kandon – and Korapay – could not be established.
Further to our letter dated 11th August 2022 in which we informed you of the progress made in the investigations into allegations of money laundering and card fraud conducted by this department. Please note that investigations are now finalised. I would like to confirm that the allegations of money laundering and card fraud made against Korapay Technologies Limited and Kandon Technology Limited were not established. Please treat this communication to be final.
In a High Court order dated November 11, 2022, the preservation order shielding Kandon from assessing its frozen accounts was regarded as spent, and “this file is hereby closed.”
Justice Esther Maina had issued the orders in two separate suits filed by the ARA against Kandon Technologies Limited over claims that fraudsters are using them as conduits of international money laundering.
In its letter to UBA, ARA said it did not want to continue the matter, so Kandon Technologies accounts’ can be unfrozen. “The Agency has completed its investigations,” the letter, dated October 27, reads.
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!