Cytonn High Yield Solutions LLP and Cytonn Real Estate LLP have faced a setback as the High Court granted the Official Receiver permission to take control of a 40-acre parcel of land in Ruiru, Kiambu County.
This decision by Justice Alfred Mabeya allows for the liquidation of the property, with proceeds intended to be distributed among investors who suffered substantial losses.
In response to objections raised by the implicated companies, the judge dismissed their claims, asserting that Cytonn High Yield Solutions, the entity in liquidation, and the two Special Purpose Vehicles (SPVs) were indeed connected.
Justice Mabeya emphasized that the SPVs failed to provide sufficient grounds as to why the property, known as Riverun, should not be sold for the benefit of the distressed investors.
"The money loaned to the two companies have not been paid up, and the only recourse is for the said property to be vested in the Official Receiver for him to liquidate the same for the benefit of languishing investors," stated Justice Mabeya.
Read More
The Official Receiver has been granted control over the Riverrun property in Ruiru, Kenya, following a petition seeking its liquidation for the benefit of Cytonn High Yield Solutions and Cytonn Real Estate projects.
The court also directed the registration of 50.08 acres in the name of Muiruri Laban Limited (MLL), which held a 50 per cent ownership interest in the property.
Cytonn Real Estate LLP and Cytonn Investment Management Plc (CIMP) each possessed a 25 per cent stake, contributing technical expertise and fundraising capabilities to the project.
The financial complexities surrounding Riverrun stem from a financing agreement between Cytonn High Yields Solutions LLP (CHYS) and CIP 12 LLP.
A loan of Sh1 billion was extended to the special purpose vehicles (SPVs) established for the project, specifically intended to address the landowner requirements of the joint venture.
Subsequently, Cytonn Real Estate Project Notes LLP entered into a separate financial agreement with CIP LLP to facilitate the property's acquisition.
However, the project ultimately encountered difficulties and was dissolved on November 11, 2022.
With the High Court's approval of the Official Receiver's intervention, the fate of the 40-acre parcel of Riverrun remains uncertain, adding to the ongoing financial challenges faced by Cytonn and its affiliated entities.
Investors, who stand as creditors in this matter, now await the commencement of liquidation proceedings, holding onto the hope that the sale of the contested property will offer some measure of restitution for their losses.
The court's decision to grant the Official Receiver control over the land signals a significant development in the ongoing legal proceedings, paving the way for the liquidation process and potential restitution for the affected investors.
