Three key Cytonn Investments real estate project Special-Purpose Vehicles (SPVs) have been placed into administration.
In a notice, the Cytonn High Yield Fund (CHYF) formally placed Cytonn Investment Partners Ten LLP (Taraji), Epazec Company LLP (Applewood), and Cytonn Investment Partners Eleven LLP (The Ridge) under administration.
Julius Ngumbau Mwengei has been appointed administrator to take control of the projects and realize the charged assets, and creditors have been given seven days to submit their claims.
The developments come as a three-judge Court of Appeal bench on Friday, November 2022, dismissed all challenges filed by Cytonn and various investor groups, confirming more than Ksh11 billion in traced investor exposure tied to Cytonn High Yields Solutions (CHYS) and Cytonn Project Notes (CPN) schemes.
Court of Appeal confirms over Ksh11 Billion exposure and liquidation
The appellate court dismissed all 18 appeals in files E116, NAI E923, E091–E094, E927–E934, E032 of 2025, and E102–E105, upholding the High Court’s earlier findings that CHYS and CPN operated as unregulated investment schemes whose funds were channelled into Cytonn-controlled SPVs without security, governance safeguards, or regulatory oversight.
The judges agreed that the SPVs were not independent entities but structures operated and funded by Cytonn Investment Management PLC and its promoters, confirming that over Ksh11 billion from more than 3,000 investors had been traced into these vehicles.
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The bench also clarified that the High Court’s earlier remark that Cytonn’s structure was “akin to fraud” did not constitute a legal finding of fraud. Instead, it described the documented pattern of unsecured inter-company lending, commingling of investor funds, and undisclosed conflicts of interest.
“What the appellants have not addressed is the finding by Mabeya, J. that the actions of the promoters of CHYS and CPN who were the same promoters of the majority of the SPVs were akin to fraud,” part of the ruling reads.
“Here is a situation where the promoters of CHYS and CPN draw up loan agreements to be executed by the SPVs, which they themselves form, and advance money to the said SPVs on the understanding the legal charges would be executed by the SPVs but for some reason the charges are not executed.”
Beyond the Ksh11 billion confirmed in court, the total investor exposure has reportedly been placed in the range of Ksh13–14 billion, based on disclosures including RiverRun and related SPVs.
Projects and assets under the Official Receiver
The Court of Appeal upheld preservation and vesting orders placing several major Cytonn projects under the Official Receiver, after forensic tracing linked them to CHYS and CPN funds.
These exposures came from the Administrator’s Report filed in Insolvency Petition E063 of 2021 and repeated in the appeal bundles.
CHYS alone had lent Ksh5.8 billion to Cytonn project SPVs without registering charges or securing investor funds. The SPVs include The Ridge, Applewood Miotoni, Taraji, Cysuites, Riverrun, Athi River, The Alma and Newtown.
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The appeals court also upheld the High Court order directing the administrator to surrender all properties, belongings, and documents to the Official Receiver, and confirmed that the companies had no viable funding model to be rescued as going concerns.
“It is our finding that the liquidation order was made under section 533 and not under section 426 as contended by the appellants. Accordingly, this ground of appeal fails,” the judges ruled.
“Having considered these appeals, we find no merit in them and consequently, we dismiss them with costs to the 1st respondent and the Creditor’s Committee. It is so ordered.”
Regulatory and parliamentary findings
The judgment aligns with the Capital Markets Authority’s warning of 17 June 2021, which declared CHYS and CPN unregulated and under criminal investigation by the Capital Markets Fraud Investigation Unit.
A 2023 Parliamentary Finance Committee report later found that Cytonn operated 49 SPVs, 20 related entities, and the CHYS and CPN schemes outside capital markets supervision, exposing thousands of retail investors.
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