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The government has suffered a major setback in its bid to drop a Sh413 million financial impropriety case against Nigerian tech firm Flutterwave after the High Court rejected a request to have a second forfeiture suit against the startup withdrawn.

The financial technology company is linked to money laundering allegations and card fraud. Money belonging to Flutterwave, Hupesi Solutions, and Adguru Technology Limited was frozen by the Milimani Anti-Corruption High Court following an application by the Assets Recovery Agency (ARA) in August last year.

The seizure took place two months after the ARA froze another Sh6.2 billion ($52.5 million) belonging to Flutterwave and six other companies last year. The Sh6.2 billion suit by ARA was withdrawn formally in March this year.

But a ruling by High Court Judge Nixon Sifuna rejected the request by ARA to have the second suit against Flutterwave withdrawn for failure by the State agency to give reasons while seeking to drop the case, including “negotiations or settlement, or the terms of such negotiations or settlement.”

“On perusal of the said notice to withdraw, l found that it (ARA) did not give any reasons for the withdrawal, and neither did it allude to there having been negotiations or settlement, or the terms of such negotiations or settlement,” the judge said.

While declining the request by ARA, the Judge wondered why the agency suddenly sought to terminate the recovery suit against the Nigerian-based firm without disclosing what informed the decision, yet they had earlier informed the court they had cogent evidence of money laundering against the firm. Justice Sifuna noted that this happened despite the agency including an affidavit by its investigator Isaac Nakitare, coupled with a trove of documents, including bank statements, as evidence that the millions in the fintech’s bank and mobile pay bill accounts were proceeds from crime and money laundering they now seek.

“The bodies entrusted with the duty to fight corruption, economic crime, organised crime and similar vices (including money laundering) should not abdicate their divine duty or become complicit in such vices,” said Justice Sifuna.

While declining the withdrawal, he added that the proceedings will be determined upon receipt of an affidavit sworn by the agency’s CEO or a high-ranking officer.

He further ordered the Deputy Registrar of the High Court to ensure the CEO of ARA is personally served with the court decision. The case will be mentioned on July 27, 2023 to confirm if the affidavit of the ARA’s CEO has been filed and for further directions. While condemning the ARA’s recent move to terminate the case without giving reasons, Justice Sifuna said the agency must be guided by public interest and that its decisions or actions have to “be open and beyond reproach in the public eye.

“Public agencies such as ARA being sustained by public funds and resources, must be accountable to the Kenyan Public. They and persons working for them at all times be guided by the public interest, and in all their actions and decisions embrace patriotism, transparency and accountability as core values of the constitution,” the Judge stated in his ruling.

Flutterwave Payments Technology Ltd is owned by Nigerians Olugbenga Agboola, Adeleke Christopher, Iynoluwa Samuel and Flutterwave Inc registered in the US.