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Court places two funds by Cytonn Investments under administration

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The High Court has allowed an application filed by Cytonn Investments Chief Executive Officer Edwin Dande to put two of its troubled investment funds under administration.

The two funds, Cytonn High Yield Fund and Cytonnn Projects Notes have faced backlash from investors over delayed returns in what the investor blamed on COVID-19 impact on cash flow leading to litigation and bad publicity.

According to CEO Edwin Dande, the administration will give the funds time to restructure, recover and return value to investors.

“This is in the best interest of investors for several reasons. First, administration provides an enabling environment for restructuring under a competent administrator. Second, it gives a moratorium on any ongoing collection efforts so that all investors get to be treated equally. It is going to be a difficult period but we shall accord the process all the support it needs to ensure that we come out of this as an even stronger brand and investor value is preserved,” said Dande.

Justice Alfred Mabeya ordered appointment of Kereto Marima as the Administrator of the Cytonn High Yields Solutions LLP until November 24, 2021 when further instruction will be issued.

“In any event, the assets remain safe, tangible and visible, but illiquid hence the need to restructure. We remain committed to always putting our clients’ needs first,” added Dande.

CHYF which is a Collective Investment Scheme pools contributions of at least on1 million from each investors with up to 80% of the portfolio being invested in real estate.

In a bid to restructure debt of the two funds, Cytonn Investments said investors had converted Kshs. 2.5 billion of their fund in CHYS and CPN into real estate for a year translating to a 20% resolution of outstanding debt owed by the two funds.

 

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