On 2nd September 2026, the Directorate of Criminal Investigations (DCI), Kenya’s main police detective unit, announced the arrest of Martin Kariuki Maina and Johnson Gituma Mwangi, the founders of FlexPay. They spent a night at Kilimani Police Station and were released on police bond.

The DCI says the two took KES 31,213,700.95 that belonged to a retail chain. FlexPay tells a different story. It says the money was the subject of a contract dispute with Naivas, the supermarket chain, for months before the arrests, and that police were being used to settle it. Nothing in either account has been tested in court.

FlexPay is a Kenyan “save now, buy later” company that we covered in December 2024 when it partnered with BuuPass on instalment bus tickets. It is a digital version of lay-by. A shopper reserves goods, such as a fridge, and pays for them in instalments. FlexPay holds the money while the shopper saves, and the shopper collects the goods at the store.

FlexPay and Naivas started working together in February 2021. FlexPay’s letter to prosecutors says that once a customer collected goods, FlexPay had to pay Naivas by the close of the next day, less a 5% discount. That 5% was FlexPay’s cut, in line with the 5% commission it described when it pitched investors in 2023. As an illustration, on a KES 10,000 item FlexPay would pass KES 9,500 to Naivas and keep KES 500.

That is the point where the police come in. The DCI did not name the retailer, but it said the two founders were the retailer’s agents, which means they held customers’ money on the retailer’s behalf, and that the money was “entrusted to the suspects for onward remittance to the retailer.” Keeping money you hold for someone else is what the DCI calls stealing by agent, under section 283(b) of the Penal Code. It says the founders, acting with other suspects still at large, diverted the money, and that they are expected to be charged.

FlexPay’s answer is that the two companies never agreed who owed whom. It says three things changed the sums, and all three are FlexPay’s allegations, drawn from its own audit and court filings.

The first is loyalty points. In December 2023 the companies changed their agreement so that FlexPay customers shopping at Naivas could earn loyalty points. FlexPay says it paid for those points up front and was supposed to be repaid by Naivas, and that by March 2026 it was owed more than KES 24 million.

The second is the commission. FlexPay says that late in 2025 Naivas wanted to cut its 5% to between 0.5% and 1%, and rejected a counter-offer of 3%. FlexPay says it processed more than KES 3 billion for Naivas over the five years, so the rate matters.

The third is inflated sales. FlexPay says Naivas staff who sold through its platform earned a 1% incentive, and that around the same time its systems began showing a KES 10,000 basket as KES 100,000, then reversing it as a typing error. On the 1% incentive, that extra zero turns KES 100 into KES 1,000. FlexPay puts such transactions above KES 300 million. It says that once these are taken into account it does not owe the KES 31 million.

Naivas’s case is in its demand letters. It says the money was owed under the contract, and its lawyers calculated that FlexPay generated KES 49.8 million in sales in February but paid KES 26.3 million.

Naivas’s demand moved from KES 29,573,326.15, due on 4th March 2026, to KES 30,211,825.25 on 16th March, and then to KES 31,213,700.95 in a termination notice on 17th March, which gave 30 days. That last figure is exactly the one the DCI later gave. In between, on 6th March, a memo from Naivas’s operations support office told branch managers to stop all FlexPay services from the next day.

FlexPay says its contract required the two sides to negotiate, then mediate, then go to arbitration, and that a meeting it asked for never happened.

The police track began while this argument was still running. In order:

  • 31st March: FlexPay’s lawyers wrote to the Office of the Director of Public Prosecutions (ODPP), the state’s prosecuting office, under the heading “Misuse of the criminal justice system”. They argued police were being used to force payment of a contract sum.
  • 2nd April: FlexPay complained to the DCI’s Economic Crimes Unit about the suspicious transactions.
  • 9th April: it wrote to the ODPP again. On 14th April the ODPP asked the DCI’s Nairobi Area office for an update.
  • 5th May: FlexPay finance executive Dennis Karanu Mwangi gave a statement to the DCI and was warned he was a suspect for “stealing by an agent”. FlexPay says it sent Naivas KES 3.07 million by bank transfer the same day, and that Naivas neither acknowledged nor credited it.
  • 2nd September: the arrests were announced.
  • 9th September: FlexPay’s lawyers filed a 15-page document asking the Director of Public Prosecutions not to approve charges.

A DCI officer familiar with the matter says Naivas asked the agency to help recover the money. FlexPay has since sued Naivas, the DCI and the ODPP.

The charge depends on one question: whether KES 31,213,700.95 was money FlexPay held for Naivas, or a sum the two were still arguing over. A demand, a counter-complaint and letters to prosecutors all came before the arrests, which is why FlexPay calls this a debt collected by police. That does not show that no money was diverted, and the DCI says it is still pursuing other suspects.

FlexPay has its own questions to answer. Customers have complained for months of delayed withdrawals and refunds, and the DCI has not linked those complaints to this case. What can be checked soon is the case FlexPay has filed, and what Naivas, the DCI and the ODPP say in response.