Nigerian fintech startup, Kora responds to allegations of fraud, money laundering in Kenya

Nigerian fintech startup Kora has responded to the allegations of fraud and money laundering against Kenya’s company and liquidity management provider Kandon Technologies, describing it as empty and baseless.

Kora, founded by Dickson Nsofor, is a pan-African payment infrastructure that provides a robust payment API for payment collection (payments) and withdrawals (payouts) and settlements.

With Kora’s services, international companies can quickly scale across Africa. With a single integration, Kora enables businesses to accept and settle payments and payouts through popular payment channels.

The company responded via a statement saying that the $250,000 it was sued for had been legally deposited into its Kenyan account as part of the Central Bank of Kenya’s (CBK) capital requirements for obtaining a payment service provider and a money transfer license .

Kora, which expanded its operations to Kenya last year, says it has documents to support its position and expresses confidence that Kenyan courts will recognize that the allegations against the company are not only completely baseless, but verging on malice. .

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the accusations

Korapay and Kandon Technologies Limited are accused of card fraud and international money laundering. Kenya’s Asset Recovery Agency (ARA) had filed two lawsuits against the companies and the Supreme Court has frozen their accounts on the suspicion that they brought more than $50 million (KES6 billion) to Kenya as part of a money laundering scheme. Lady Justice Esther Maina froze $249,990 (KES 29.5 million) in Korapay’s Equity Bank account, while Kandon Technologies had $126,800 (KES 15 million) in 2 UBA accounts frozen by Justice Maina. ARA says the two companies are part of an international gang of fraudsters who use Kenyan banks to receive money from an untraceable foreign source. Their activities came under suspicion when an account received $249,990 (KES 29.5 million) in a single transaction. An investigation by Kenyan authorities shows that between October 2021 and April this year, the bank accounts were settled cumulatively (5.5 billion KES). ARA says it has verified that the companies are based in Kenya to use the country’s liberal financial system to launder money. So far, investigations have linked both companies to a Kenyan businessman – Simon Karanja – whose bank accounts were also frozen.

what they say

However, Kora responded to the allegations, explaining in a statement from its Head of Marketing and Communications, Gbenga Onalaja: “As part of the CBK’s capital requirements for obtaining a payment service provider and a money transfer license, Kora has deposited amount of $250,000 into his freshly opened bank account. In line with the requirements of the CBK, this amount has been left untouched pending the granting of our permit. Easily verifiable records from this account show that the $250,000 deposit is the only transaction to date in that account.”

“Unfortunately, Kora has been dragged through Kenyan courts since May 2022 on empty, baseless charges of money laundering. As a responsible corporate citizen, we have consistently challenged all these allegations in court and will continue to do so; we have documents that support our position. We are confident that the Kenyan courts will recognize that the charges against us are not only completely baseless, but verging on malice.

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“Kora is deeply committed to being an ethical African payments company. In all jurisdictions from which we operate, we adhere to strict compliance standards through rigorous anti-money laundering (AML) processes. We intend to continue working with Kenyan regulators to resolve this issue as Kenya remains a critical part of our African ambitions,” it added.

What you should know

These allegations come just a week after another Nigerian fintech, Flutterwave, was also accused of money laundering in Kenya. Flutterwave had also denied the allegation. Responding via a statement dated June 7, Flutterwave Kenya has denied involvement in financial irregularities under the guise of providing trading service as stated in recent reports. The company said it earns its fees through transaction fees, the data of which is available and verifiable.

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