Cytonn Investments Management Plc’s has placed two of its investment products under administration as part of ongoing efforts to turn around their performance.
The independent investment management firm said the products are the Cytonn High Yield Solutions and Cytonn Projects Notes. The administration process was initiated by Cytonn’s Chief Executive Officer Edwin Dande.
“Administration gives the funds the room to restructure, recover, and return value to investors. The administration is not liquidation,” the Group said in an emailed statement.
Kerato Marima, a licensed insolvent practitioner has been appointed by the High Court Commercial and Tax Division as the administrator of the property of Cytonn High Yields Solutions LLP ahead of further court directions to be issued on November 24.
“This is in the best interest of investors for several reasons. First, the 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,” said Dande.
The alternative investment management firm has undergone a series of legal battles with the Capital Markets Authority opening investigations into Ksh Sh13.5 billion Cytonn High Yield Solutions and Cytonn Project Notes. The two products are unregulated.
However, Cytonn says legal suits emerged following the onset of Covid-19. As a result, the funds experienced liquidity strains that were further aggravated by negative publicity and sustained regulatory attacks.
“In the circumstances, the board of investors of the funds concluded that administration was the best option to provide an enabling environment to restructure the funds and return value to investors.”
The Group says its other eight funds continue to operate as usual with the regulated pooled funds experiencing a 17.2% growth in Q1’2021 as per the latest CMA quarterly bulletin.