The Pan-African Paradigm of Contract Disputes and Criminal Leverage
A purchase of KES 10,000, about 77 dollars, would appear on the platform as KES 100,000, then quietly disappear. That, according to FlexPay’s lawyers, is the pattern its systems detected in transactions at Naivas, Kenya’s largest retail chain by branch count, and which its audit eventually put at more than KES 300 million, roughly 2.3 million dollars. Naivas, for its part, said FlexPay owed it about KES 30 million, around 231,000 dollars, in customer payments that had not been remitted. TechCabal’s investigation reconstructs how a five-year commercial partnership collapsed into competing claims, and how the money at the center of the quarrel ended up being pursued through police cells rather than a boardroom or an arbitration hearing.
The partnership began in February 2021, when Naivas engaged Flexitech Group Limited, trading as FlexPay, to run an installment-payment platform inside its stores. FlexPay’s lawyers say the arrangement processed more than KES 3 billion, about 23.1 million dollars, in transactions, a figure a Naivas insider confirmed to TechCabal. The contract was meant to run until February 2028. Its dispute-resolution clause called for negotiation, then mediation and, if necessary, arbitration. None of those stages was completed.
From Commercial Accounts to Criminal Complaints
TechCabal’s reconstruction, drawn from contracts, internal memos, demand letters, police statements, prosecutor correspondence and court filings, shows a relationship fraying from late 2025, when FlexPay says Naivas sought to cut its commission from five per cent to between 0.5 and one per cent. On 6 March 2026, an internal Naivas memo ordered stores to stop FlexPay transactions from the next day. Lawyers for Naivas demanded about KES 30.2 million, and the figure claimed rose from KES 29.6 million to KES 31.2 million within two weeks. FlexPay disputed the account, citing unreimbursed loyalty points it put at over KES 24 million, contested commissions, and the suspicious transactions. TechCabal notes that it has not independently audited these figures or established that any transactions were deliberately manipulated.
What changed the nature of the dispute was the entry of the state. A Directorate of Criminal Investigations official told TechCabal that Naivas sought the agency’s help in April to recover the money from FlexPay’s founders, Martin Kariuki Maina and Johnson Gituma Mwangi. FlexPay had lodged its own complaint with the DCI’s Economic Crimes Unit on 2 April over the alleged staff manipulation. The dispute was now running through the criminal system in both directions.
Pressure, Arrest and the Public Theatre of Suspicion
The DCI source described months of repeated calls to the founders, some involving demands to settle and, the officer alleged, threats and demands for bribes. TechCabal stresses that it could not independently verify those allegations and that neither Naivas nor the DCI responded to its requests for comment. What is documented is that FlexPay’s lawyers wrote to the Office of the Director of Public Prosecutions on 31 March under the heading ‘misuse of the criminal justice system’, that the ODPP asked the DCI for an update in April, and that a FlexPay finance executive was questioned as a suspect for ‘stealing by an agent’ in May. At the start of September, police arrested the founders in Nairobi, held them overnight, and released them on police bond; TechCabal’s account places the arrest on 1 September in one passage and 2 September in another. Images of the executives then circulated online alongside theft allegations.
A Pattern, Not an Anomaly
TechCabal situates the case within a broader trajectory in which Kenya’s criminal justice system is used to resolve commercial disputes. It cites Citibank Kenya’s application to the High Court in July seeking to stop the DCI from investigating its chief executive over a disputed KES 261 million loan to the Kenya Tea Development Agency for its Kiru Tea Factory, with the bank arguing that investigators were criminalizing a commercial decision. The structural concern is asymmetric leverage. When one party to a contract can mobilize police powers, the threat of arrest and public shaming becomes a bargaining tool that dwarfs the sums in dispute. That distorts not only individual negotiations but the risk calculations of every fintech that partners with a larger incumbent.
What the Courts Must Now Decide
The matter is now before the courts. FlexPay has sued Naivas, the DCI and the ODPP, and on 9 September its lawyers asked prosecutors not to approve charges. TechCabal is careful to say that the records it reviewed do not establish that no crime occurred, only that the disputed money was already the subject of an unresolved commercial dispute before the founders were publicly accused of theft. That distinction is the crux. Either the accounts conceal a crime that the police were right to pursue, or a contractual quarrel was escalated into a criminal case. The court’s answer will set a reference point for how Kenyan institutions draw the line.
Closing: Sovereignty of Contract Over the Reach of the Cell
Kenya has built one of Africa’s most celebrated digital-finance ecosystems on the premise that contracts between large and small firms will be enforced predictably and impartially. Structural sovereignty in a market economy depends on that premise as much as on regulation or capital. If the architecture of policing can be enlisted by whichever party has more weight, the cost falls on innovation, on investor confidence and on the credibility of the justice system itself. The Naivas and FlexPay case may yet reveal wrongdoing on one side or both. But the trajectory of how it was handled, from memo to demand letter to police bond, is already a lesson. Commercial disputes need commercial forums, and criminal powers need firewalls against private leverage.
