The founders of Flexitech Group Limited, the company behind the Kenyan save-now-buy-later fintech FlexPay, have been arrested over the alleged theft of KES 31.2 million ($242,000) belonging to an unnamed major retail chain, adding to scrutiny of the startup after months of customer complaints about delayed withdrawals. Martin Kariuki Maina and Johnson Gituma Mwangi were arrested in Roysambu, Nairobi, by detectives from the Directorate of Criminal Investigations (DCI), the agency said on Wednesday.
The DCI said the two were acting as agents of the retailer and allegedly collected money from customers who had purchased goods and picked them up at several of the retailer’s branches. The money was supposed to be remitted to the retailer. “The funds had been entrusted to the suspects for onward remittance to the retailer,” the DCI said.
“However, detectives established that the two, acting jointly with other suspects still at large, allegedly diverted the funds for their own use.” The two are expected to be arraigned at the Milimani Law Courts and charged with stealing by agent under Section 283(b) of Kenya’s Penal Code, according to the DCI. Investigations are continuing, with detectives pursuing other people they believe were involved.
The arrests come after months of complaints from FlexPay customers about difficulties accessing money saved on the platform and delays in receiving products they had already paid for. Recent reviews on Google Play show customers complaining that withdrawals take considerably longer than expected and that they have difficulty getting responses from customer support.
In July, one customer said a KES 15,000 ($116) refund requested in June had still not been processed, while another complained that withdrawals were taking longer than previously. Similar complaints appeared earlier in the year, including from customers who said they had completed their savings goals but were waiting weeks for refunds.