An investigative report has accused one of Nigeria’s largest tech unicorns Flutterwave of allegations bothering “insider trading, fraud, and perjury” occurring over a 4 year period.
In one of the most damning accusations against one of Africa’s largest Tech Unicorns in Africa, the report largely accuses Olugbenga Agboola, Co-Founder of Flutterwave of engaging in impersonation, insider trading and inappropriate behaviours in the workplace.
This was revealed in an investigation report on the company, by independent investigative Journalist David Hundeyin on Tuesday titled, “Flutterwave: The African Unicorn Built On Quicksand”, he accused the organization of fraud, perjury, and insider trading shedding a dark cloud over one of the most respected tech startups in Africa.
Mr. Hundeyin confirmed to Nairametrics that he authored the article. Nairametrics cannot independently verify some of the details and accusations in the article. Flutterwave was yet to respond to Nairametric’s requests for comments on the matter at the time of publishing but promised to share a statement soon.
The article has also gone viral on social media and is being discussed across several channels including Twitter spaces and ClubHouse. Mr Hundeyin also granted a Twitter Spaces audio session where he discussed the article with listeners.
Highlights of the report
- The expose was based on interviews with three ex-employees of Flutterwave whom the writer said he had an extensive discussion for his story. The accusation was largely on Mr, Olugbenga Agboola “GB”, the founder of Flutterwave.
- He accused Mr, Olugbenga Agboola (GB), the founder of Flutterwave of engaging in “insider trading” by offering to buy “stock options” from employees at a price “lower” than the “market price”.
- He also alleged that this was an offense under US law and could attract jail time.
- He also accused GB of impersonating and double-dealing by using his contact as a staff of Access Bank (Nigeria’s largest bank by asset base) to give deals to Flutterwave unbeknownst to unsuspecting clients and Access Bank. GB was also working for Access Bank at the time.
- He also accused Flutterwave of engaging in “fraudulent” activities by dealing Arik Air without “paperwork” thus facilitating transactions without proper documentation.
- “Basically someone at Arik started a payments company to process payments for Arik, but he was processing through Flutterwave. So he got a cut of every Arik transaction – and Arik transaction volumes were among the biggest at Flutterwave – but there was no reseller agreement. Isn’t that basically corruption?”
- Mr. Hundeyin also accused legal firm Banwo and Ighodalo “B&I” of caving in to the demand of Flutterwave by advising a client to drop a case against the Tech Unicor after they had initially told the client otherwise,
- “Suddenly and without notice, shortly after presenting a professional opinion stating that Flutterwave was in the wrong and had a case to answer, B&I quietly informed Jennifer that they had been retained by Flutterwave and they would have to drop her case. Apparently whenever Flutterwave wants anything in Nigeria – ethical or not – GB just signs a cheque and makes any problem go away.”
- The report further accused investors in Flutterwave of largely ignoring some of the accusations even though they were aware of them.
- “Someone sent an email detailing all these fraudulent activities to every investor on the cap table, and they are all aware and they talk about it, but they did nothing.”
What David Hundeyin is saying
Nairametrics reached out to Mr. Hundeyin on the insider trading accusation to which he responded as follows
“Under American SEC regulations, insider trading also applies to companies whose stocks are traded privately. Contrary to the popular idea, there are in fact pricing mechanisms to determine the market price of non publicly traded stocks, using workarounds like Pitchbook, which function as de-facto stock trade ledgers for private stocks. Thus, contrary to the narrative being promoted that such stocks can be priced unilaterally by an individual since there is no supply and demand equilibrium matching mechanism, the market prices of private stocks can in fact be accessed easily. This classifies the deliberate underpricing of employee stocks and subsequent stock buyback of such underpriced stocks as insider trading, which carries a penalty of up to 20 years imprisonment in the US.
He also stated that different employees had different stock option contracts which perhaps explained the trigger for the alleged “insider trading”.
” It should also be noted that clauses stipulating what prices employees would be allowed to sell their stocks at were not in fact included in Flutterwave employment contracts for the period in question. Thus different employees were able to obtain different prices for their stocks depending on their bargaining power or influence with the CEO, which potentially opened the door to a whole new set of problems relating to favouritism, office politics and inappropriate workplace relationships.”
This article is the second in a series of stories targeted at the Nigerian Tech Ecosystem. Last two weeks Tech Cabal published a “toxic workplace article accusing the now-suspended CEO of Bento Africa Ebunoluwa Okunbanjo of workplace harassment. Okunbajo issued an apology for the behaviour.
Read the full article on accusing Flutterwave by David Hundeyin here.
I have ALWAYS hated this company immediately I had an issue I needed to be resolved and they kept playing me. I personally wrote to GB via Twitter hoping to hasten and resolve the issue, till tomorrow, he NEVER replied me.
While it’s encouraging to see a Nigerian journalist undertake such investigative reporting, the outcome falls well short of its promise. An A+ for effort but a D for substance.
For starters, doubtful that the SEC would be interested in allegations of insider trading in a non-publicly-traded entity, as the SEC’s brief is protection of the investing PUBLIC. And frankly NONE of the events described in the piece amount to “insider trading”.
Furthermore, stock options are not identical. Terms governing each award (including exercise and/or disposal) are governed by the particular contract wrt such award. Without being privy to the details thereof, it’s impossible to tell if anyone was “duped”.
Finally, the allegations of predatory sexual behavior was most troubling, but sadly reflective of sexism and misogyny prevalent in Nigerian society. Companies in Nigeria must be made to institute a robust “strict liability” policy against such behavior.
CONGRATS to the journalist on a very commendable (and brave, in Nigeria) effort. Hopefully, he won’t be discouraged that the outcome fell considerably short of promise. We get better by doing and learning.
Sam you evaluation is watery and snacks on sentimental bias for Flutterwave. I’m compelled to suspect you are a troll for Flutterwave.
Well that Said.. All Wrongs have been observed. I will like to encourage the journalist to also highlight the great things done by the accused in the Fintech space.. That will help bring clarity to understanding your case!