The IGP’s motion, filed on July 17, 2024, aimed to reverse withdrawals from Flutterwave’s Wema Bank account resulting from a system glitch between October 12 and 13, 2023.
The IGP’s legal team claimed that around 244 suspects had stolen billions from Flutterwave, funneling the money into various bank accounts linked to untraceable individuals.
Justice Lifu criticized the ex parte motion for violating Section 36 of the 1999 Constitution, which ensures the right to a fair hearing.
He highlighted that the banks involved had not been given a chance to respond to the claims.
“Should I order them to reverse the funds without hearing their side of the story, based on your one-sided account?” Justice Lifu questioned, adding, “If I grant the reversal, what is left of this case? You did not file a motion on notice. Once I reverse it, that is the end of the matter.”
The court’s ruling underscores the necessity of procedural fairness and the requirement for all parties to be heard. IGP’s counsel, Victor Okoye, had argued for immediate action to recover the funds due to the untraceable nature of the suspects.
Despite this, the judge insisted on the need for a motion on notice and proper service to the banks.
The controversy originated from a 2023 system glitch on Flutterwave’s platform, which led to fraudulent transactions involving approximately N21.2 billion. Flutterwave reported a potential loss of N11 billion but claimed to have blocked the breach and retained N7.2 billion.
The IGP has since arrested several individuals linked to the fraud.
The court’s decision could significantly affect Flutterwave’s customers and the fintech sector at large.
The inability to reverse the stolen funds may result in transaction disruptions or delays, potentially impacting Flutterwave’s reputation and financial stability.
This case highlights increasing cybersecurity threats within the fintech industry, revealing vulnerabilities that affect service providers and their clients.
It reflects broader challenges in digital transaction security and financial institutions’ efforts to safeguard customer funds.
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