Relief has come for Cytonn’s investors, as Justice Alfred Mabeya of the High Court orders the firm to liquidate real estate projects in efforts to recover more than Sh14 billion the firm owes its investors.
Justice Mabeya further ordered the preservation of the company’s assets and housing projects identified as “the Alma, Applewood/Miotoni, Riverrun, Ridge and Taraji” until the liquidation is concluded.
In the judgment delivered on January 6, the judge noted that over 3,000 individuals had put in excess of Sh11 billion in Cytonn High Yield Solutions (CHYS) and 886 others over Sh4 billion in the Cytonn Real Estate Project Notes (CPN).
“The court must be sensitive and alive to the plight of over 3,000 members of the public who sank their over Sh11 billion and 886 others whose over Sh4 billion was sunk into these projects and therefore lean towards a lesser evil, which is to preserve those assets for the time being,”
“It is not in dispute that Cytonn Real Estate Project Notes (CPN) is seriously ailing, and the Creditors have suffered and continue to suffer as CPN is unable to pay what it owes them. The Court is therefore of the view that the viable option would be to liquidate the company and to appoint a Liquidator who will have the interests of the Creditors at heart,” Justice Mabeya said.
Also Read: Thousands of Jobs at Stake as Government Delays Registration of Private Security Companies
The administration process of the two investment funds started on October 6, 2021.
Mr. Marima (who had been proposed by CPN directors and is acting as the Administrator) said the process was yet to achieve its purpose asking the court to extend the administration period, but the investors were opposed to the bid and were pushing for the liquidation.
The court also appointed an official receiver as the liquidator of the company following a finding that Mr Marima had links with promoters of CPN and CHYS to the detriment of the creditors.
The court acknowledged that CPN was still under the administration of its directors despite the administration order being in place.
“It is, therefore, no wonder that even after the Administration order, Edwin Harold Dayan Dande, who describes himself as the Chief Executive Officer of CIMP, is the one swearing and filing affidavits,” the court noted.
The judge further ordered that all other legal proceedings against Cytonn be suspended to await liquidation and that those claims be lodged with and be proved before the liquidator.
Discussion about this post