Reality-checking 2 main allegations in opposition to Olugbenga Agboola

Up to now 48 hours, social media has been set ablaze as allegations of fraud, insider buying and selling, sexual harassment, and a number of other different issues have been made in opposition to Olugbenga “GB” Agboola, the CEO and founding father of considered one of Africa’s unicorns, Flutterwave.

On Tuesday, April 12, 2022, investigative/freelance Journalist, David Hundeyin revealed the most recent version of his publication, the West Africa Weekly. In it, utilizing screenshots of emails, Slack messages, WhatsApp correspondence, and official-looking paperwork, he weaves a narrative that has raised extra questions than it has answered. 

Does an worker promoting inventory choices by power represent insider buying and selling?

In keeping with Hundeyin, staff had been pressured to promote their inventory choices to an funding automobile stated to be owned by Olugbenga Agboola.

Olugbenga Agboola, Flutterwave CEO

Hundeyin’s report claims they bought for decrease than market worth, as decided by Agboola, and tags this as insider buying and selling.

However earlier than we go into that, how do worker inventory choices work?

How do worker inventory choices work?

An worker inventory choice (ESO) is compensation given by an organization to the worker. This offers them potential entry to shares within the firm at a preset worth. Nonetheless, earlier than they’ll entry stated shares, the inventory should have been vested.

In plain communicate, vesting means now you can train or purchase the corporate’s shares. It occurs progressively, so if the contract says that the vesting interval is 4 years, you can’t totally entry your inventory choice till 4 years after the settlement.

In some instances, you may entry the half that has vested. Let’s use an instance. Chike owns ESO in XYZ firm. In keeping with the contract, he should have stayed with the corporate for 4 years earlier than exercising his choice. Within the first 12 months, he can entry 25% of the inventory. If he chooses to not, within the second 12 months, he can entry half of the ESO, and it goes on and on until the fourth 12 months, when he can then entry 100%.

ESOs solely develop into helpful if the corporate’s inventory worth rises above the preset worth within the settlement. So if Chike was instructed that the value he should buy the inventory is when it rises to $3, if it rises to $4, he should buy it for reasonable at $3. 

Workers normally wait until liquidity occasions like an Preliminary Public Supply (IPO) or a merger or discover somebody keen to purchase their inventory choice if they’re impatient.

So, was there insider buying and selling?

From a screenshot dated February 28, 2021, that Hundeyin shared, this worker seems to have exercised his choice to purchase however then needed to promote these shares. They’re provided an choice to promote at $3.4999, which they spherical off to $3.5 and settle for.

Additionally embedded within the article is a blurry video stated to be from a possible Flutterwave investor explaining how he arrived at a doable share market worth. At Collection D, shares can be valued at $52. At Collection C, $20.25, Collection B, $4.47.

What SEC filings present

From our archives, Flutterwave introduced a Collection B spherical in January 2020, a Collection C in March 2021, and a Collection D in February 2022. 

In keeping with EDGAR (a US Securities Change Fee firm search platform) filings, the date of first sale — when Flutterwave first started receiving cash — for the Collection C was February 2021, two days earlier than the sale by the worker. The ultimate filling was made on March 12, 2021.

SEC Kind D discover which, in keeping with SEC guidelines, firms like Flutterwave need to file inside 15 days after the primary investor commits to their funding spherical

So let’s piece all of this collectively. Flutterwave begins elevating Collection C in February. Worker sells in February at $3.5 decrease than the potential $20. Flutterwave completes elevating Collection C spherical in March 2021.

Subsequent query: who purchased these shares?

Hundeyin says it was Agboola, however the above screenshot reveals the worker conversing with Kayinsola Adepoju, Flutterwave’s Investor Relations Supervisor.

Sources near the matter revealed to that the inventory was purchased by present shareholders, who had been exercising their first proper of refusal, and never Agboola.

Can this be labeled as insider buying and selling in keeping with the US Securities Change Fee (SEC) Guidelines?

Aspect notice: Flutterwave is an organization included in Delaware within the US and, as such, is ruled by US legal guidelines and rules.

In keeping with SEC Rule 10b-5, which offers for insider buying and selling, it’s unlawful for anybody to defraud or deceive somebody, together with misrepresenting materials data in regards to the sale or buy of a safety.

Basically, the corporate’s officers, administrators, or insider staff mustn’t withhold any materials data that would moderately have an effect on the share worth or have an effect on the judgment of the particular person planning to purchase or promote inventory.

Does insider buying and selling apply to personal firms? 

A 2011 case, SEC v Stiefel Laboratories Inc, seems to reply this query.

In 2009, Stiefel, a family-owned non-public firm, was bought to GlaxoSmithKline. Nonetheless, earlier than the sale, the corporate defrauded shareholders of $110 million by withholding materials details about the valuation of the shares held by Stiefel staff and the sale of the corporate.

This enabled the corporate to purchase again these shares at an artificially low worth and was discovered to have violated Part 10(b) and Rule 10b-5 of the Securities Change Act of 1934.

What then is true?

Reality 1: Insider buying and selling is prohibited when materials data that would have an effect on the sale of a safety or the customer’s or vendor’s judgment is withheld.

Reality 2: Flutterwave as a personal firm could be investigated by the SEC for insider buying and selling, following the Stiefel case.

Reality 3: Flutterwave started elevating its Collection C and filed its first sale on February 26, 2021, two days earlier than the worker bought their shares at $3.5.

Reality 4: Flutterwave closed Collection C and filed with SEC on March 12, 2021, and share costs supposedly elevated.

What continues to be debatable, nevertheless, is that if the shares had been bought to Agboola or the buyers and if there was any coercion. Does this depend as insider buying and selling? 

There’s nonetheless a bit extra to unpack from Hundeyin’s article, and it has to do with Agboola’s time at Entry Financial institution 

Was Entry Financial institution conscious of any of this?

Agboola at Entry Financial institution Hackathon in 2017

Going by Agboola’s LinkedIn profile, he labored at Entry Financial institution from November 2014 to Could 2016. It additionally says he based Flutterwave in Could 2016 and assumed his CEO function in 2018.

Hundeyin, nevertheless, says that Agboola didn’t resign from his job at Entry as Head, Digital Manufacturing facility and Innovation till 2018. Not solely did he not resign, however he didn’t inform his superiors at Entry Financial institution of this truth whereas making use of firm sources to construct Flutterwave.

Hundeyin shares a number of screenshots of WhatsApp Direct and Group messages between a contact saved as Olugbenga Agboola and an worker. In a single dated August 10, 2016, Agboola is seen telling the worker that he can be appearing as Entry Financial institution and never Flutterwave in a specific matter.

In one other screenshot with no date, the contact saved as Olugbenga Agboola says that Adeleke “Leke” Adekoya — a  Flutterwave co-founder and Head, Digital Banking at Entry Financial institution — would signify Entry Financial institution, whereas Paul (Akingbade) and the worker would supposedly act as Flutterwave.

By the way, Paul Akingbade labored at Entry Financial institution as a Enterprise Purposes Supervisor till 2019 and now heads Core Change Engineering at Flutterwave.

One other screenshot dated June 16, 2018, reveals the contact saved as Olugbenga Agboola mentioning that he was lastly leaving Entry Financial institution in July, wanted exit necessities, and that he thought he owed them some cash.

He additionally says that every one Entry Financial institution workers now know “he’s in Flutterwave”. The dialog then focuses on their suspicions and strikes to an already established story which portrays Agboola as a mere advisor on the board.

In an interview with Massive Tech This Week revealed on April 3, 2022, Agboola doesn’t point out the date he resigned at Entry Financial institution however says he had begun engaged on Flutterwave at a co-working house. He then introduced in Adekoya and Iyin Aboyeji, former CEO and Co-founder at Flutterwave.

Curiously, Agboola claims Aboyeji had left Andela. Nonetheless, in keeping with Aboyeji on this tweet made on April 13, 2022, he was nonetheless at Andela till Could 2016, when Flutterwave was included “by his hand.”

In his article, Hundeyin alleges that in early 2018, Agboola, Aboyeji, and Herbert Wigwe — Entry Financial institution CEO — traveled to the US for a SEC listening to and testified beneath oath that Agboola by no means labored concurrently at Flutterwave and Entry Financial institution.

Why would Wigwe journey to the US with Agboola and Aboyeji?

Aboyeji, in one other tweet on April 13, 2022, admits that he did certainly go to the US for a SEC listening to, however he went alone. 

In a second tweet, he mentions that the listening to was concluded in 2017 and never 2018, as Hundeyin claims.

Conversely, in keeping with the interview with Massive Tech This Week, Agboola claims that he flew to the US with Wigwe once they had been making an attempt to accumulate Uber as a consumer. Though he doesn’t point out a particular date, Uber grew to become a Flutterwave consumer in 2016.

However there’s one other tangent right here that includes Flutterwave and a few cash allegedly owed to Entry Financial institution

Why does Entry Financial institution ship that letter?

Hundeyin’s article features a letter dated August 30, 2018, during which Entry Financial institution claims that Flutterwave owes the financial institution ₦221,106,830.80 (~ $530,000).

In keeping with Hundeyin’s supply named ‘Ose’, within the third quarter of 2018, whereas conducting an audit for the Entry-Diamond merger, Entry Financial institution found that Flutterwave had been settled for transactions however wasn’t giving the financial institution its share.

Apparently, this was an association between Flutterwave and Entry Financial institution, which Agboola describes as their “first buying financial institution.” He additionally mentions Wigwe’s function in serving to to onboard potential shoppers who would then domicile their conventional companies with the financial institution.

Aspect notice: An buying financial institution permits a service provider to simply accept digital funds. 

Coincidentally, Aboyeji stepped down two months after Entry Financial institution despatched the letter.

What are the info?

Reality 1: Agboola labored at Entry Financial institution.

Reality 2: Wigwe travelled with Agboola to San Francisco for a number of conferences.

Reality 3: Aboyeji says there was an SEC listening to that solely he travelled for.

Reality 4: Flutterwave and Entry Financial institution had a partnership that meant transactions would move by the financial institution.

Reality 5: Wigwe knew that Agboola was working at Flutterwave.

Who then is mendacity? Why was there a SEC listening to? Does Wigwe realizing imply that Entry Financial institution’s board knew?

Like we stated in the beginning, a number of questions nonetheless stay unanswered, however whereas we await an official assertion from all events concerned, we are able to draw conjecture based mostly off the info that we have now verified.

Ogheneruemu Oneyibo

Author, Humanoid, Eternally she/her, Lover of phrases.


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