Cytonn’s attempts to overturn court decisions on its collapsed investment schemes have hit a wall after the Court of Appeal rejected all pending challenges tied to the failed Cytonn High Yields Solutions (CHYS) and Cytonn Project Notes (CPN). The rulings confirm that over KSh 11 billion from more than 3,000 investors was funnelled into unregulated Cytonn-controlled vehicles now being liquidated.
The appellate judges upheld the High Court’s conclusion that investor money was moved into Cytonn-run special purpose vehicles with no security, weak governance and no regulatory supervision. The court also agreed that the SPVs were not independent operations but extensions of Cytonn Investment Management PLC and its promoters.
The phrase previously used by the High Court, describing Cytonn’s structure as “akin to fraud” was affirmed as an observation, not a formal finding of fraud, and was based on documented practices such as unsecured inter-company lending, fund commingling and undeclared conflicts of interest.
A 2023 report by Parliament’s Finance Committee later corroborated that Cytonn operated CHYS, CPN, 49 SPVs and 20 related entities entirely outside capital-markets oversight, leaving thousands of Kenyans exposed.
While the courts have verified investor exposure of just over KSh 11 billion, wider estimates place total losses between KSh 13 billion and KSh 14 billion, based on disclosures examined by The Star.
The Court of Appeal also upheld orders placing Cytonn-linked assets under the Official Receiver after forensic audits tied them to CHYS and CPN funds. Key properties include RiverRun in Ruiru, built using more than KSh 831 million from CHYS, with a court-filed valuation of KSh 2.113 billion, and The Alma in Ruaka, where exposure stands at KSh 1.437 billion.
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Other preserved projects include Kilimani Apartments (CIP16), CySuites/Wasini in Westlands, Taraji Heights, The Ridge, land in Athi River, Mystic Plains/Newtown, Applewood/Miotoni, and Cytonn’s 12.5 per cent stake in Superior Homes Kenya.
The figures come from the Administrator’s Report in Insolvency Petition E063 of 2021, which shows CHYS alone advanced KSh 5.8 billion to project SPVs without registering any charges to protect investors.
These rulings echo the Capital Markets Authority’s June 2021 declaration that CHYS and CPN were unregulated products under criminal investigation, a position Cytonn itself conceded, noting CHYS fell outside CMA’s purview. The liquidator will now move ahead with valuations and asset sales to recover funds, though secured creditors such as SBM Bank will be paid first.
