Nigerian fintech startups, Kora and Kandon cleared of money laundering allegations in Kenya

In July 2022, a Kenyan High Court froze the accounts of Nigerian fintech companies, Kora and Kandon Technologies Limited, for allegedly siphoning Sh6 billion (~$51 million) into the country. Lady Justice Esther Maina issued the orders in two separate suits filed by the Asset Recovery Agency (ARA).

The court froze $249,990 (Sh29.5 million) belonging to Kora's account with Equity Bank, while Kandon Technologies Ltd had its $126,841 (Sh15 million) in two accounts at UBA bank frozen. According to the ruling, both companies were barred from withdrawing or transferring money in the stated accounts for six months so that ARA can complete investigations into the allegations.

However, within four months, ARA filed a notice at the High Court of Kenya at Nairobi Anti-Corruption and Economic Crimes Division, withdrawing the charges against both Techstars-backed companies.

"Please note that investigations are now finalised. I would like to confirm that allegations of money laundering and card fraud against [Kora] were not established. Please treat this communication as final," according to a document from the Kenyan Directorate of Criminal Investigation (DCI), shared with Kora earlier this week.

Prior to this latest development, Kora told Benjamindada.com in July 2022 that "the Kenyan courts will come to see that the accusations against [Kora] are not only wholly baseless but borderline malicious."

According to the fintech, the frozen funds were part of the capital requirements from the Central Bank of Kenya (CBK) for obtaining a payment service provider and remittance operator license (PDF Pg. 720). "Kora deposited the sum of $250,000 in its freshly opened bank account. In line with CBK requirements, this amount was left untouched pending the granting of our license," the company said in July 2022.

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"Kora has always maintained its innocence in this matter and we are glad that finally the ARA and the DCI have dropped all charges and ratified Kora. We'd also like to commend both agencies for their professionalism and thoroughness in seeing this investigation to the conclusive end," Gideon Orovwiroro, Kora's Chief Operations Officer, stated in a statement shared with Benjamindada.com.

What's next for Kora in Kenya?

Kora expanded its operations to Kenya in 2021. Within the same year, the company processed over $1.5 billion in transaction volume in only two African countries—Nigeria and Kenya.

Founded in 2018 by Dickson Nsofor and Bryan Uyanwune, Kora was built to help Africans in the diaspora make remittances to the continent. However, the company pivoted to build a robust payment infrastructure that is enabling both local and foreign businesses to process payments in and out of Africa. "We started with remittances but we figured out that if we can simplify payment within Africa as well, it will build wealth for the continent," Orovwiroro told Benjamindada.com in a previous interview.

"Kora acknowledges potential Kenya presents as we pursue our mission to make it easy for global businesses to accept payments in Africa, and for African businesses to accept global payments. We are delighted to get back to building the most robust payment product on the African continent," Orovwiroro added.

"We have some exciting announcements coming soon, including multi-currency bank account products for African businesses. This will empower merchants to have bank accounts in GBP, EUR, USD and other in-demand currencies. Kora is excited about this development as it is further proof of its commitment to enrich the quality of merchants' payments and build more meaningful financial products."

Kora has disclosed that it will engage relevant authorities in order to obtain relevant licences and operational permits in Kenya.