Crisis at Cellulant

The Cellulant Crisis Backstory: How Employees’ Dirty Deeds Did CEO Dirty


September 28, 2020

It does seem like it’s the season of internal hiccups and scandalous drama for African startups, and much of the action is set in Nigeria. 

After the odd episode at Cars45 and in the midst of the power tussle at HealthPlus, there’s been a storm at one of the continent’s foremost and most prominent tech startups, Cellulant. And that storm hasn’t exactly passed.

It was Thursday, September 24, when word first got out that the Nigerian co-founder/co-CEO of Cellulant Corporation and CEO of Cellulant Nigeria, Bolaji Akinboro, had resigned from the fintech company he co-created with Kenyan entrepreneur, Ken Njoroge, in 2004. And the circumstances of his exit was anything but cheerful.

By the time the rumours morphed into news reports, the story from anonymous sources was that Akinboro’s resignation had something to do with “unhealthy corporate governance practices by the board of directors and the group’s compliance unit.”

The stories peddled about also had it that the “Cellulant crisis” had resulted in the “unethical terminations of more than 30 staff of Cellulant,” presumably individuals mired in whatever operational malpractice had occurred within the company.

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Well, it turns out that some internal malpractice did happen, and although Akinboro has left queries from WeeTracker unanswered for days, the Nairobi-based company has volunteered some explanation for the quiet quakes that have been erupting inside the company.

WeeTracker gathered from the company that 14 employees have in fact been fired from the company after some irregularities were discovered in the operations of Cellulant Nigeria’s agritech platform, Agrikore. The Agrikore platform is a distinct product line of Cellulant’s broader diversified payments business.

Fresh from raising what was at the time a record USD 47.5 Mn Series C from TPG Growth’s Rise Fund in 2018 — bringing its total funding amount to USD 54.5 Mn — Cellulant set out to further scale its blockchain-based agritech platform spear-headed by Akinboro himself, which had reportedly served more than 7 million farmers across the continent at the time.

According to Cellulant, Agrikore exists to better connect farmers to the market and help them to sell their goods to a diverse range of buyers more easily.

Having already claimed a turf as a dominant force in African fintech by enabling real-time digital payments in 12 African countries — via an ecosystem that claims to connect 28 mobile operators, 31 banks, and more than 200 blue-chip companies — Cellulant claims that its agritech solution has “registered 14.5 million, contributed USD 30 Bn to the Nigerian GDP, and increased farmers’ income from USD 700.00 to USD 1800.00.”

But that Agritech platform, Agrikore, is now the source of trouble. By design, it’s a blockchain-based payment and online marketplace system for smallholder farmers, agricultural input, and produce traders, created to close gaps in the agriculture supply chain.

However, according to Cellulant, it turns out some members of the Agrikore team have been implicated in what can most-kindly be described as less-than-honest dealings. And being responsible for the platform, Akinboro resigned from all his management positions within the Cellulant group in late August.

“While conducting a compliance review on the Agrikore platform, we identified certain aspects of the compliance infrastructure and control framework of the platform that have not kept up with the platform’s rapid growth. An investigation revealed that 14 Agrikore employees had inappropriately received funds from Agrikore wallets,” the company said.

Despite the malpractice, Cellulant maintains that there is no indication that customer funds were compromised and that the platform was shut down immediately the malpractice was discovered. The company also indicated that further investigations are on.

A portion of the company’s statement reads thus: “As soon as we understood the issue, we moved quickly to temporarily shut down the Agrikore marketplace, inform our customers and regulators, and terminate the employees involved.”

Cellulant claims it has engaged an independent “Big 4” accounting firm to conduct a complete forensic review of marketplace wallets and a well-respected Nigerian law firm to lead a full, independent investigation of the platform.

It was also reiterated that Cellulant, the payments business which operates in multiple countries across Africa and represents the substantial majority of the group’s business, remains unaffected by the shakeup and is fully operational.

Featured Image Courtesy: Daily Trust

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