The money and card fraud allegations against Korapay, a Nigerian payment startup have been cleared. The payment startup has been accused by Kenya’s Asset Recovery Agency (ARA) of money laundering among other frauds in July.
ARA is a Kenyan agency that identifies, traces, freezes, seizes, confiscates, and recovers proceeds of crimes in the East African country.
In July 2022, ARA filed two separate suits. This led to the freezing of Kora’s account alongside Nigeria’s Kandon Technologies Limited by a Kenyan Federal court.
Fraud Allegations Cleared Against Korapay: What Happened?
Koraplay and Kandon Technologies Limited were accused of siphoning Sh6 billion ( $51 million) into Kenya. With that, Lady Justice Esther Maina ordered the court to freeze $249,990 (Sh29.5 million) in Kora’s Equity Bank account.
Kandon Technologies Limited also faced the same fate as $126,841 (Sh15 million) got frozen in its two UBA accounts.
Both companies were also linked with five other companies and a businessman. The five companies include Flutterwave Ltd, Elivalat Fintech Ltd, Hupesi Solutions, Boxtrip Travels and Tours, Bagtrip Travels Ltd, and Cruz Ride Auto Ltd.
The businessman on the other hand is Simon Karanja, whose 62 bank accounts have been frozen over similar allegations.
Reacting to the allegation, Flutterwave’s CEO has since denied the allegation. According to him, the allegation is politically motivated to target Nigerian firms close to Kenya’s election.
Because of the July 14 ruling, both startups could not operate the frozen accounts for six months until investigations are complete.
The aftermath of the Investigation
It appears the case has been settled out of court just four months into the investigation. This is according to documents seen by TechCabal.
In a document filed on the 19th of October, 2022 by state counsel Stephen Githinji on behalf of the ARA director, the agency said that it has withdrawn its lawsuit.
Another document issued by the Directorate of Criminal Investigation (DCI) in September, shows that there is no evidence to prove both companies guilty.
Fraud Allegations Cleared Against Korapay Dropped: CEO’s Reaction
Reacting to this, Kora’s Chief Operations Officer, Gideon Orovwiroro, in a statement said,
“We are confident that the Kenyan courts will come to see that the accusations against us are not only wholly baseless but borderline malicious.”
As part of the capital requirements from the Central Bank of Kenya (CBK) to obtain a payment service provider and remittance operator license, Kora deposited the sum of $250,000 in its freshly opened bank account.
This amount was left untouched pending the granting of Koraplay’s license. This is also in line with CBK’s requirements
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