CBN gets court’s order to block accounts of fintech companies

Justice Ahmed Mohammed of the Federal High Court, Abuja, on Tuesday granted the Central Bank of Nigeria (CBN)’s request to block accounts of six fintech companies for the next six months.

The firms are Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Bamboo Systems Technology Limited OPNS, Chaka Technologies Limited, CTL/Business Expenses, and Trove Technologies Limited.

The judge gave the order while ruling on a motion filed by a former Attorney-General of the Federation and Minister of Justice, Chief Micheal Aondoakaa (SAN), on behalf of the CBN Governor, Godwin Emefiele.

The apex bank approached the court to order the temporary freezing of the companies’ accounts pending the conclusion of an investigation into their financial activities.

The CBN alleged that Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Chaka Technologies Limited and Trove Technologies Limited operate in Nigeria without licenses as asset management companies and utilize forex sourced from the Nigerian foreign exchange market for purchasing foreign bonds/shares in contravention of its circular with reference No: TED/FEM/FPC/GEN/01/012 and dated July 01, 2015.

The apex bank told Justice Mohammed that the foreign exchange deals with the defendants contributed to the devaluation of the Naira, hence the need to block their accounts for 180 days.

READ ALSO: CBN to freeze 194 accounts of BDCs, other companies; Here’s why

Part of the motion reads:

“An Interim Order of this Honorable Court empowering the Plaintiff/ Applicant to direct the Head Offices of ZENITH BANK PLC (Churchgate Street, Victoria Island, Lagos), GUARANTY TRUST BANK PLC (Plot 635, Akin Adesola, Victoria Island, STANDARD CHARTERED BANK (142, Ahmadu Bello Way, Victoria Island, Lagos.), ACCESS BANK OF NIGERIA (999c, Danmole Street, Off ldejo Street, Off Adetola Odeku Street, Victoria Island, Lagos), VFD MICROFINANCE BANK (Elephant House. 5, Floor, 214 Broad Street, Marina Island, Lagos), to freeze forthwith all the bank accounts of the Defendants/ Respondents for a period of 180 days pending the outcome of investigation and inquiry conducted by the CBN.”

“Rise Vest Technologies Limited was Incorporated In October 2018 with objects of technological and business consultancy. The shareholders of the company at incorporation were Eke Eleanya Urum and Rise Vast Technologies Limited (USA). The company partners with companies involved in payments and settlements as well as internal and international remittances.

“However, information on the company’s website indicated that it is an asset management company, which provides a platform for customers to invest in foreign instruments using an app called “Risevest”.

“Our review revealed that the company consummated its asset management activities through its account 1017556580 with Zenith Bank Plc, which recorded a turnover of 1.97 billion between January 1, 2019 and April 27, 2021.

” Inflows to the account were mainly from retail investors through two Payment Service Solution Providers (PSSPe): Flutterwave (588.61 million) and Monnify (N967.58 milllon).

“Outflows from the account were to a PSSP – Paystack (500 00 milllon) and cryptocurrency traders Ike BuyCoins (N110.00 millon) and Beltlum Venture (N350.00 million). Inquiries on the transactions confirmed that the transfers to Buycoins were for the purchase of cryptocurrency.

“The above is indicative that Rise Vest Technologies Limited traded in cryptocurrencies in contravention of the CBN circular referenced BSD/DIR/PUB/LAB/014/001, dated February 5 2021.”

“Bamboo Systems Technology Limited Bamboo Systems Technology Limited is owned by US-based Bamboo Global LLC (99.99%) and Oluwole Raiph Olugbenga (0.01%).

“The company was incorporated in December 2018 to carry on the business of software design, implementation, development, maintenance and consultancy amongst others. It is related to One Global Med. Technology, BSTL Lambeth and Grag Concepts Limited.

“Further reviews showed that Bamboo Systems Technology Limited operates an online App, “Bamboo”, that provides a medium for investors to buy and sell stocks, exchange traded funds (ETFs), Index funds and derivatives listed in major exchanges in the U.S.”

Furthermore, Aondoakaa told the judge on Tuesday that the CBN was worried about how monies were going out of the country.

“We need to write the Embassy, we need to go to the Foreign Affairs….the Minister will serve the US to seek assistance so that we can block this linkages,” the lawyer added.

In his ruling, Justice Ahmed said “having listened to senior counsel to the applicant, on the motion Exparte filed in August, it is granted as prayed”

He said that any person who feels aggrieved about the freezing order is entitled to approach the court within the period so as to seek redress.

He then adjourned the matter to February 20 for hearing.

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