CMA probes Cytonn funds for ‘criminal violations’

Capital Markets Authority (CMA) Chief Executive Wyckliffe Shamiah. [Courtesy]

The Capital Markets Authority (CMA) is currently investigating some funds managed by Cytonn Investments for criminal violations.

CMA Chief Executive Wyckliffe Shamiah urged investors hit by investing in the unregulated products to report to the Capital Markets Fraud Investigation Unit.

He said they were forced to come out following “numerous enquiries” on the licensing status of Cytonn Investment Group. "The authority confirms that Cytonn Investments is not a licensed and approved entity," said Mr Shamiah in a statement sent to newsrooms.

Investigations have been going on for a while with a section of investors seeking help from the Directorate of Criminal Investigations.

Cytonn has two faces - regulated and unregulated products - with CMA saying it had not received any complaints on the regulated products.

CMA has licensed Cytonn Asset Management Ltd, which is a fund manager for the regulated funds including several unit trust funds.

Shamiah said investors should only invest through licensed and approved entities offering regulated products to enable them to get protection through the capital markets legal and regulatory framework.

Cytonn is facing at least 25 court cases – including liquidation petitions – by investors irked by the extension of maturity dates last year after Cytonn invoked a force majeure citing Covid-19.

The investors are in two of its unregulated real estate funds – the Cytonn High Yield Solutions and the Cytonn Project Notes.

The firm in April announced plans for an extraordinary general meeting to decide the fate of two troubled Sh15.9 billion real estate funds.