An expert raised their concerns as Nigerian fintech company Flutterwave is considering an Initial Public Offering (IPO) in the country and the United States (US) amid its money laundering scandal.
Should this consideration come to reality, BizWatch Nigeria understands that the IPO would see the shares of Flutterwave listed on the Nigerian Stock Exchange (NGX), and the York Stock Exchange (NYSE).
Bloomberg reports that some sources familiar with this development cited the recent recruitments into key positions. According to them, those recently hired were all in the company’s plan for the IPO.
It would be recalled that Flutterwave recently hired Oneal Bhamban, a former VP at American Express, as its new Chief Financial Officer (CFO). The company similarly hired Gurbhej Dhillon, a former Managing Director (MD) at Goldman Sachs, as its new Chief Technology Officer (CTO).
However while plans are ongoing for the realisation of the IPO, there are worries that it might suffer a setback given the generally bearish sentiment across global stock markets, and the company’s money laundering scandal.
Flutterwave and its recent scandals
Just last month (July 2022), a Kenyan court froze the bank accounts of Flutterwave over a money laundering allegation.
The Nigerian firm, according to Kenyan authorities, was one of seven entities suspected to have been used as conduits for money laundering in the guise of providing merchant services. Although Flutterwave debunked the allegation, as it argued that there was existing proof that exonerate it from such misconduct.
Flutterwave’s business also took a direct hit, as the company’s former employees accused its management of nursing culture of harassment and bullying from executives.
Amongst the former employees was one Gbemisola Ajayi, who sought the payment of $800,000 or the value of shares she said she was unfairly denied.
According to Ajayi, she decided to leave the company in March 2020 after the working environment “became toxic” and weighed on her mental health, adding that out of “malice”, Flutterwave refused to award stock options she was promised.
Reacting to the IPO plan, a corporate lawyer and African startup investor, Raj Kulasingam expressed an opinion that global investors are not ready to buy the company’s shares its staggering reputation.
“The Flutterwave story was one of an African fintech and it being the leader for Africa as the next frontier for fintech and venture investors. Then the unravelling of that story started and it hasn’t stopped yet. With all of this, I don’t believe that the international public markets are ready for a Flutterwave IPO,” Kulasingam explained.