NAIROBI, Kenya — Three major Cytonn Investments real estate project vehicles have been placed under administration, marking a decisive turn in a long-running financial dispute that has affected more than 3,000 investors.
In a notice issued this week, 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 as the administrator and granted authority to take control of the projects, realise charged assets and invite creditor claims within seven days.
The move follows a landmark Court of Appeal decision on Friday, November 21, that dismissed 18 appeals filed by Cytonn and various investor groupings, confirming more than Ksh11 billion in traced investor exposure tied to the Cytonn High Yields Solutions (CHYS) and Cytonn Project Notes (CPN) schemes. The cases included appeals E116, NAI E923, E091–E094, E927–E934, E032 of 2025, and E102–E105.
The appellate judges upheld an earlier High Court finding that CHYS and CPN were unregulated investment schemes whose funds were channelled into Cytonn-controlled Special Purpose Vehicles without securities, governance checks, or regulatory supervision.
The court noted that the SPVs were not truly independent of Cytonn Investment Management PLC but were structures designed, funded, and operated by the same promoters.
The ruling also clarified that although the High Court had described Cytonn’s financial structure as “akin to fraud,” this did not amount to a legal finding of fraud. Instead, it referred to the pattern of unsecured inter-company lending, commingling of investor contributions, 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 SPV,s were akin to fraud,” the judgment states.
The bench cited instances where promoters drafted loan agreements between CHYS/CPN and SPVs they themselves formed, promising to register legal charges that never materialised.
While the court confirmed Sh11 billion in traced investor exposure, parliamentary disclosures and administrator reports have placed the total exposure at between Sh13 billion and Sh14 billion, when other entities such as RiverRun are included.
The Court of Appeal further upheld the High Court’s liquidation order, agreeing that the companies lacked a viable funding model to continue as going concerns.
It confirmed preservation and vesting orders placing key Cytonn assets — including The Ridge, Applewood Miotoni, Taraji, Cysuites, RiverRun, Athi River, The Alma, and Newtown — under the Official Receiver.
In the Administrator’s Report filed in Insolvency Petition E063 of 2021, CHYS alone was shown to have lent Sh5.8 billion to various project SPVs without registering charges, leaving investors completely unsecured.
The bench dismissed arguments that the liquidation was made under the wrong statutory provisions. “It is our finding that the liquidation order was made under section 533 and not under section 426 as contended by the appellants,” the court ruled, adding that all appeals failed.
The judgment reinforces earlier warnings from the Capital Markets Authority (CMA). On June 17, 2021, the regulator declared CHYS and CPN illegal and unregulated, placing them under criminal investigation by the Capital Markets Fraud Investigation Unit.
A 2023 report by the National Assembly’s Finance Committee later found that Cytonn operated 49 SPVs and 20 related entities outside capital market supervision, exposing thousands of retail investors to risky, opaque, and unsecured transactions.
With the administration process now underway, creditors are expected to begin submitting claims as the Official Receiver takes full control of the projects, setting the stage for the next phase of asset recovery.
