The High Court in Kenya has granted permission for the official receiver to take control of three properties in Nairobi’s Kilimani area linked to Cytonn, a company placed under liquidation in January. The decision follows opposition from Cytonn Investment Partners and another creditor, with concerns raised by regulated investors. The court’s ruling allows the official receiver to seize properties associated with Cytonn High Yields Solution (CHYS).
Key Points:
- Liquidation and Property Seizure:
- Cytonn was placed under liquidation in January, and the official receiver sought control of properties tied to CHYS. Despite opposition from Cytonn Investment Partners and another creditor, the court granted permission for the official receiver to seize the properties.
- The properties are linked to Cytonn-affiliated firm CIP 16 LLP, with the court emphasizing that the receiver is within their mandate to trace assets for the benefit of investors.
- Ownership and Loan Details:
- The court allowed the official receiver to take over 12.5% shares (250,000,000 ordinary shares) in Superior Homes (Kenya) held by CIP 15. CHYS had advanced a loan of Sh500 million to CIP 15, half of which was used to purchase the shares in Superior Homes.
- Evidence presented in court indicated that CHYS had loaned CIP 16 Sh3 billion to acquire the Kilimani property. The court ruled that the receiver is at liberty to value the properties and shares for potential realization.
- Traceability of Investments:
- The court highlighted that even though CHYS Company and CIP 16 were distinct entities, creditors were entitled to trace their investments in CIP 16. The decision allows for the recovery of funds owed to over 4,000 investors.
- Preservation Orders and Liquidation:
- In January, the court placed CHYS under liquidation, and preservation orders were issued for the company’s assets and housing projects, including “the Alma, Applewood/Miotoni, Riverrun, Ridge, and Taraji.” The liquidation aims to recover more than Sh14 billion owed to investors.
Conclusion: The court’s decision to allow the official receiver to seize properties linked to Cytonn is a significant development in the liquidation case. It underscores efforts to recover funds owed to investors and addresses concerns raised by regulated investors. The liquidation process will continue, with the court emphasizing the preservation of assets until its conclusion.
