Senegalese Court Jails Founder Of Fintech Company Wari, Slams $3.6m Fine For Breach Of Trust

Karibou Mbodj, the founder and CEO of Senegalese money transfer company Wari, has been condemned to six months in prison for criminal breach of trust. He was also sentenced to a fine of two billion FCFA ($3.6m), and maximum bodily constraints by a judge of the Court of Dakar’s correctional chamber. 

A competitor, Tap Tap Send, sued the Mbodj for breach of trust. Wari and Tap Tap Send had forged a partnership, with the latter being granted access to the Wari platform.

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Under their contract, Tap Tap Send clients were required to make a deposit in reference to their operations, and any unused funds were to be reimbursed to them upon request.

Wari was reported to have refused to reimburse the money when it was first proposed. This is why a lawsuit was launched for breach of trust.

Wari fintech court Senegalese
Karibou Mbodj, founder of Wari. Image credits: Pulse Senegal

A Chequered Startup Journey For Karibou Mbodj

Karibou Mbodj’s case with Tap Tap Send is one of the many cases he had faced, including among them allegations of sexual misconduct. 

In May this year, a Senegalese court dismissed a case involving him and his co-founders Malick Fall, Seyni Camara, and Cheikh Tagué on grounds of fresh documentary evidence. 

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These documents pertained to an auditor’s reports on the audits of Wari and Interactive’s financial statements. The suit had been on for more than ten years. 

The Facts Of The Case: 

  • In the case, Kabirou was charged with breach of trust. 
  • The damages was estimated to be worth 22 billion CFA francs, according to his former associates. 
  • According to Malick Fall, Wari was formed in 2008. The startup however transitioned from a limited liability company to a public limited corporation. 
  • Malick Fall and Cie attacked Kabirou Mbodje for excluding them from the startup they founded together, despite the fact that they started from the ground up to make Wari the market leader. 
  • According to Malick Fall, Kabirou plotted false operations to impoverish them. This, he said, Kabirou accomplished by concealing the company’s results in order to justify a capital increase.

“The three of us had 39 percent. Kabirou increased the capital in 2013 by multiplying it by ten. He came to say that the company was struggling and that it was necessary to increase the capitalisation to the tune of $300 million, while the company offered itself 4×4 and other perks. From 39% to just over 3%, we’ve come a long way. He lied on the financial statements,’’ Malick Fall Mallick was quoted as saying.

“He hid the capitalisation from 2012 on purpose. He did it to prove that we lack sufficient equity. We’ve been diluted by the capital increase,” he added.

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  • For his side, Cheikh Tagué disclosed that Kabirou Mbodje illegally claimed 8% of Wari’s turnover, or 500 million CFA francs.
  • Furthermore, the co-founders claimed that the company Interactive was founded two years after Wari was founded. They accused Kabirou Mbodje of devouring them once more.

“Wari…Surpassed 6 Billion Euros Mark In Transactions Per Year”

In 2019, Mbodje announced that Wari had crossed the threshold of 6 billion euros in transactions per year, a success that came only 10 years after the start of the adventure: 

“At the start, ten years ago, Wari was an initiative. We started with one country, ten relay points and a few transactions.Ten years later, Wari is available in 50 to 60 countries, connected to 172 banks, with more than a million daily transactions, thousands of jobs created and 300 employees. This is an important balance sheet as we have grown to 6 billion euros in annual transactions. At first, Wari was an initiative. Today, it’s a real business,” said Kabirou Mbodj in an interview with Financial Afrik.

Apart from finance, Mbodje attempted to purchase telecoms company Tigo, now Free Senegal, but was unsuccessful due to bitter legal, media, and lobbying battles that favored the Teyliom, NJJ, and AXIAN consortium.

Wari fintech court Senegalese Wari fintech court Senegalese

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer