Cytonn is very dangerous as it’s not regestered, be on high alert says CMA

The Capital Markets Authority (CMA) has opened a probe against Cytonn Investments following numerous complaints from investors.

Cytonn Investments is Not a Licensed Entity, CMA Says

The regulator said it is looking into Cytonn High Yield Solutions (CHYS) and Cytonn Project Notes (CPN), which have investments worth Sh13.5 billion.

The two funds have allegedly failed to pay investors upon maturity of their investments in real estate properties developed by Cytonn.

Cytonn has been marketing the funds as private placements, which do not fall under the domain of CMA, but the agency has the powers to investigate the funds if it receives complaints from the public.

Since last year, Cytonn has faced many legal suits from investors over contract breaches after the company deferred payment of their investments, citing liquidity problems occasioned by the Covid-19 pandemic.

CMA CEO Wyckliffe Shamiah urged affected investors to report to the Capital Markets Fraud Investigation Unit (CMFIU), which is the Police Unit attached to the Capital Markets Authority.

“CMFIU is currently investigating the issue for criminal violations for investors in the Cytonn High Yield Solutions (CHYS). The Authority confirms that Cytonn Investments is not a licensed and approved entity,” he said in a statement.

There are six Cytonn funds that are regulated by CMA, including Cytonn Money Market Fund, Cytonn Balanced Fund, Cytonn Equity Fund, Cytonn Africa Financial Services Fund, Cytonn Money Market Fund (USD), and Cytonn High Yield Fund.

Cytonn was founded in 2014 by Edwin Dande, a former US-based Kenyan entrepreneur, and three others.

Dande, who worked for Lehman Brothers and Bank Of America before returning to Kenya in 2011, is the CEO of Cytonn.