A host of Nigeria-based companies are being investigated for multi-billion-shilling money laundering scandals.
The Asset Recovery Agency (ARA) has been on the trails of the companies and businessmen it alleges are behind the syndicate, with allegations that they used the country’s favourable banking system to siphon more than Sh100 billion.
In the last two months, the State agency filed several suits and unmasked the faces behind the alleged secret dealings before obtaining orders freezing their accounts with estimated Sh30 billion.
“The Nigerian firms are shell companies incorporated in Kenya for purposes of taking advantage of the liberal financial system to launder funds whose sources are not legitimate. They have been receiving billions of shillings from foreign jurisdiction but the sources are not known,” said ARA.
ARA filed the suits under the Proceeds of Crime and Anti-Money Laundering Act (PROCAMLA), which provides that any unexplained assets acquired through fraudulent means must be forfeited to the state.
Among the Nigerian companies that have been under the agency’s radar are Flutterwave Payment Technology Limited, Elivalat Fintech Ltd, Hupesi Solutions, Boxtrip Travels and Tours Limited, Bagtrip Travels Limited, Adguru Technology Limited and Cruz Ride Auto Limited.
Others are Avalon Offshore Logistics Limited, OIT Africa Limited, RemX Capital Limited, Rainbow Techemploy Africa Limited, Korapay Technologies Limited and Kandon Technologies Limited.
Some of the companies describe themselves as start-up Financial Technology (Fintech) companies, which source and transfer money to their clients across different countries.
But ARA, in the various court cases, has dismissed claims that the Fintech companies are engaged in clean businesses, stating that investigations revealed the firms executed complex schemes of money laundering designed to conceal and disguise the nature and movement of illicit funds.
Earlier last week, the State agency stepped up the push by filing a formal application against Avalon Offshore Logistics Limited, OIT Africa Limited and RemX Capital Limited to have Sh5.7 billion in their accounts forfeited to the State for being proceeds of crime.
According to court records, Avalon Offshore Logistics Ltd was registered as a start-up company in Kenya in November 2020, with the directors listed as Jeffrey Nnaoma Michaels and Uduma Okoro Christopher, who are Nigerians.
The two, who operate the firm from an office at Delta Corner House in Westlands, are also listed as owning several other Fintech companies in Nigeria.
The records further showed that Avalon Offshore Logistics Limited is linked to OIT Africa Limited and has Kenyans, Vionnah Akoth and Kenneth Raminya, as directors while RemX Capital Limited has Nehikhare Eghosasere and Demuren Olufemi Olukunmi John Kisilu as directors.
ARA claimed in the suit that the three companies are part of an international money laundering syndicate where they transfer billions of shillings into the country without declaring the source or destination of the funds.
“Our investigations established that the funds held by the companies are direct benefits and proceeds of crime obtained from a complex money laundering syndicate scheme and are liable to be forfeited to the State,” said ARA through lawyer Mohamed Adow.
According to ARA, the three companies are suspected to have moved more than Sh25 billion into the country from foreign jurisdictions between October and November 2021 and that they only got wind of the illegal transactions when the accounts were having a balance of Sh5.7 billion.
The State agency claims that although the companies are listed as owned by two Nigerians and the Kenyans, the faces are just acting as proxies of powerful individuals behind the multi-billion-shilling money laundering scandal.
“We have discovered that they are part of a syndicate where they are using local banks as conduits of illicit huge amounts of money whose source has no legitimate explanation,” said Adow.
He added that the six accounts registered in the companies’ names are holding funds suspected to be proceeds of crime acquired through money laundering activities from various countries.
ARA claims that OIT Africa has Sh4.9 billion in its three accounts at Equity Bank and United Bank for Africa (UBA), RemX Capital Limited has 787 million in its dollar account at UBA while Avalon Offshore Logistics Limited has Sh43.5 million in its two accounts at Equity Bank.
The agency’s investigator, Fredrick Musyoki, in his affidavit swore that they received information on February 11 that the companies are engaged in international money laundering and upon investigations established that they had received the money from multiple locations.
“The money was mainly from foreign jurisdiction and when we summoned the directors, they could not explain their sources, which made us believe they are proceeds of crime liable for forfeiture to the State,” swore Musyoki.
According to the investigator, the companies’ bank accounts had credits from various suspicious sources before they conducted hurried withdrawals and transfers to other countries.
Before the dust could settle on the discovery, ARA filed a suit against a second set of five Nigerian companies and obtained orders freezing their 62 bank accounts with over Sh6.5 billion.
The Nigerian companies named in the suit were Flutterwave Payment Technology Limited Limited, Elivalat Fintech Limited, Hupesi Solutions Limited, Boxtrip Travels and Tours Limited, Bagtrip Travels Limited and Cruz Ride Auto Limited.
Flutterwave Ltd, which describes itself as a Fintech company that provides payment technology for merchants and processes payments on the Web, mobiles, ATM, and point of sale worldwide, is owned by Nigerians Olugbenga Agboola, Adeleke Christopher and Iynoluwa Samuel.
Justice Esther Maina froze Flutterwave’s accounts with Sh5.17 billion, Sh467.1 million for Boxtrip Travels and Tour, Sh436 million for Bagtrip Ltd, Sh1.16 million belonging to Elivalat Fintech Ltd, Sh1.6 million for Hupesi Solutions, Sh2.4 million for Cruz Ride Auto Ltd and Sh14 million for a Mr Karanja.
“Analysis of the company accounts showed they received more than Sh13 billion within a span of six months but hurriedly transferred some amounts to unknown jurisdiction, leaving a balance of Sh6.5 billion,” said ARA.
ARA argued that the Nigerian companies received the billions in different denominations of Kenya shillings, US dollars, Euros and Sterling pounds in a suspected scheme of money laundering where the money were deposited in different bank accounts to conceal the nature and source.
The agency claimed that the companies failed to explain and provide supporting documents to prove the source of the funds, which made them conclude they are a vehicle used by money launderers to move illicit funds.
But the companies, in their response through MMA Advocates, argued that they do clean business by facilitating payments for the biggest organisations in the world and everyday businesses for which they have records that can be verified.
Lawyer Donald Mosota, representing Flutterwave Limited, said the company processes large amounts of money and earns its commission, which contributed to growing the Kenyan economy and Africa through e-commerce.
“One of the claims against Flutterwave is that it received Sh12.4 billion in a single account at Equity Bank. However, given the nature of its business, the amount is neither outsized nor unusual because as a payment company they charge between 2.9% and 3.4% transaction fee,” said Mosota.
He said the claim that there was no explanation or supporting documents provided to support the transactions is false as Flutterwave has records to show that the payments are genuine and were processed on behalf of legitimate clients.
As the fight to nab the Nigerian firms continued, ARA filed two other cases against two more Nigerian companies, Korapay Technologies Limited and Kandon Technologies Limited, who are also suspected to have siphoned more than Sh6 billion into the country.
The agency claimed that although the two firms dealt with the huge amounts between October last year and April this year, they only managed to nab Sh44 million, which were frozen by Justice Maina.
In the first case against Korapay Technologies Limited, Justice Maina froze $249,990 (Sh29.5 million) in their account at Equity Bank while Kandon Technologies Limited had its Sh15 million in two accounts at UBA frozen.
ARA in its suit against the two companies argued that they are part of the international ring of fraudsters who have been using Kenyan banks as conduits of illicit money whose source cannot be established.
In the case against Kandon Technologies Limited, ARA claimed that they siphoned Sh5.5 billion, which was transacted through their bank account at UBA in a period of seven months between October 2021 and April this year.
“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.
The company is listed as owned by Nigerian nationals Uzoamaka Pauline Okoro with 200 shares and Ayowole Oluwasen Ayodele with 800 shares.
For Korapay Technologies Limited, the State agency said they established it is owned by Gideon Oghenetega Orowiroro and Dickson Chukwuma Nsofor and that they too had been receiving millions of shillings in their accounts before the money is siphoned to other individuals.
“We established that they received the Sh29.5 million in a single transaction which raised suspicion as to the source of the funds,” said ARA.