Why Korapay and Kandon Technology limited are facing fraud allegations in Kenya

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Following Flutterwave, more Nigerian fintechs face legal issues in Kenya

Worrying times for Nigerian-based Fintechs in Kenya, as more companies are charged with legal issues. Following Flutterwave’s report last week.

Kenyan authorities recently froze accounts with Sh45 million belonging to Korapay Technology Limited, founded in 2017 and Kandon Technology Limited, founded in 2019.

Led by Kenya’s Asset Recovery Agency, two lawsuits have been filed on accounts of card fraud and money laundering.

Nigerian fintech startup, Kora reacts to allegations of fraud, money laundering in Kenya - Nairametrics

The Asset Recovery Agency has claimed that these companies receive several millions of shillings and distribute to 62 other accounts in what is considered suspicious.

As the court prohibits them from receiving or transferring funds, these firms could face difficulty operating, as funding remains crucial to getting any business running.

Beyond its limiting effects, Korapay, Kandon could face total cessation of operations if found guilty of being a party to any international ring of fraudsters as alleged by the authorities.

Korapay has responded to these charges as baseless accusations and has made public the firm’s commitment to resolving this by presenting the required documents to support its position. Kenya remains an important market for these firms, so understandably, the firms will prioritise resolving these issues.