Kiwipay, which is embroiled in a Sh811 million legal battle, faces heightened scrutiny as detectives investigate three bank accounts belonging to Ecobank Kenya Ltd.
Detectives from the Directorate of Criminal Investigations (DCI) are stepping up investigations into three bank accounts linked to the payment solutions company.
The investigation follows an application by one Maxwel Otieno, a DCI officer, who sought an order from a Nairobi court in December.
Otieno submitted a formal request seeking access to the account opening documents and bank statements spanning from March 1, 2020, to June 30, 2023.
His application also included a request for comprehensive records of Real Time Gross Settlement (RTGS), Swift, electronic transfer, and customer transfer transactions associated with the three bank accounts during the specified period.
The court application was prompted by complaints from four foreign firms—Futuregate Labs Ltd and A&M Le Mont Venture Ltd from Cyprus, and Airwallet Payments and Goldenpay DMCC from Singapore—seeking $5.82 million (Sh811 million) from Kiwipay’s frozen funds.
Kiwipay (K) Ltd, majority-owned by Kiwipay PTE in Singapore, is embroiled in a legal battle as the foreign firms allege non-remittance of funds despite hiring Kiwipay as an online payment service provider.
The firms, through their legal representatives at Kimani, Kiarie & Associates, submitted that Kiwipay collected Sh898 million from numerous transactions on their behalf but failed to transfer the funds as per their agreements.
In a letter to the Directorate of Criminal Investigations, the complainants outlined the contractual obligations.
“In the contract, parties agreed on the settlement date, and Kiwipay PTE is required to transmit the funds it has collected to various designated merchants whose websites and purchases were made by customers,” the letter stated.
The letter emphasized that Kiwipay was obligated to make regular payments to individual merchants, deducting a nominal agreed fee for the provided service.
The four firms are seeking court orders to preserve the funds in the three Ecobank Kenya Ltd accounts held by Kiwipay (K) Ltd, pending the completion of the investigations.
“Unless the honourable court revisits the orders sought in the notice of motion applications dated June 27, 2023, seeking to preserve the funds in the said accounts, the applicants (Futuregate Labs, A&M Le Mont Venture, Airwallet Payments and Goldenpay) will suffer grave injustice,”
Their application, filed on December 19, followed High Court Judge Alfred Mabeya’s decision to grant Kiwipay access to the funds and affirm the authority of CEO Gregory Schmidt to transact any amount on the accounts.
The frozen billions initially stemmed from suspicions raised by the Assets Recovery Agency (ARA), linking the funds to an international card fraud syndicate.
Although the freezing orders were later lifted, a legal tug-of-war ensued when Rashi from Laos and three Kenyans claimed the billions, creating a complex legal landscape.
As detectives delve into the intricacies of the case, the dispute over the $5.82 million continues to unravel, shedding light on the complexities of the online payment industry and the challenges posed by allegations of non-compliance with contractual obligations.
