Details has emerged as to how Marasoft Pay, a Nigerian fintech resorted to paying its staff salaries using funds from an alleged fraudulent source and
Details has emerged as to how Marasoft Pay, a Nigerian fintech resorted to paying its staff salaries using funds from an alleged fraudulent source and how it allegedly boomeranged in its face.
Marasoft Pay owned by Emmanuel Marakwe-Ogu operates in Kenya and Nigeria and allows businesses and individuals to collect payments via its platform. However, because it does not hold local licenses in Kenya, it processes transactions through a Flutterwave wallet which it has used since 2022.
In October 2024, employees experienced what seemed like a long-awaited resolution: payment of two months of overdue salaries. But their relief was short-lived.
Within days of receiving their payments, employees were stunned to discover that their accounts, along with the accounts of those they had sent money to were frozen. According to former employees of the company, the funds, they learned, had been traced to an alleged fraudulent source.
The series of unfortunate events began on October 16, 2024, when a glitch allowed Marasoft access to more funds than it had in the wallet, enabling the company to withdraw over ₦84 million ($54,000). According to transaction records, Marakwe-Ogu initiated 102 withdrawals from his Marasoft account within 12 hours, each linked to his phone number and bank verification number (BVN).
The timing of the glitch could not have been more fortuitous: it came a week after employees stopped working due to growing frustration over unpaid salaries. While the company paused operations on October 10, it continued to process transactions.
Between October 16 and 17, Marakwe-Ogu paid ₦35 million in overdue salaries directly from the Flutterwave wallet.
In a WhatsApp chat with employees, Marakwe-Ogu admitted to using his company account to pay salaries after employees noticed that the payments did not come from the human resources account.
Employees were right to be worried. Days after receiving salary payments, their accounts were frozen, and over 40 workers began a legal battle to unfreeze their funds.
After paying employees from the Flutterwave wallet, Marakwe-Ogu transferred ₦49 million to various accounts through payment processors like Transact Pay, a European fintech that generates virtual accounts, to a VFD Bank account he controlled, complicating retrieval efforts.
A week later, on October 24, TransactPay sent a recall request for ten transactions worth ₦19.3 million, copying former Marasoft employees. By then, several Marasoft employees’ accounts were frozen, and many were left scrambling for answers.
While Marakwe-Ogu continued to tell employees that the restrictions were a mistake and would be lifted, he agreed to a five-month repayment plan with Flutterwave expiring in February 2025, a former employee with direct knowledge of the matter revealed.
Marakwe-Ogu also requested a recall of the salaries through the Nigerian Inter-Bank Settlement Scheme (NIBSS) using Marasoft.
By November, it became clear that the situation was worsening, and employees began resigning. As the employees pushed for answers, he removed them from the company’s WhatsApp group and stopped taking their calls, complicating their efforts to get the restrictions on their accounts lifted.
The fallout from the incident has been painful but Marasoft resumed operations in January and at least eight employees have returned to the fintech despite the frozen accounts and owed salaries.
TechCabal
