The Court of Appeal has upheld the High Court’s decision to maintain liquidation orders against Cytonn High Yield Fund (CHYS) and its associated Special Purpose Vehicles (SPVs), cementing the Official Receiver’s authority to oversee recovery for thousands of investors affected by the collapse.
Who Was Involved
The consolidated appeals brought together a wide range of parties, reflecting the scale of the Cytonn fallout.
Appellants included:
- Benedicta Mukulu Musembi & 24 Others
- Charles K. Wambu & 6 Others
- Pakamu Ventures Limited (now Rudium Holdings Limited) & 8 Others
- Ephraim Karangi
- Cytonn Investments Partners Four LLP & 10 Others
- Mamelodi Holding Company Limited & 7 Others
- Goal Advisory Africa Limited (suing as Trustee to Cytonn High Yield Fund)
- Valerina Jiwa & 289 Others
Respondents were:
- The Official Receiver
- Cytonn Integrated Project
- SBM Bank Limited
Court’s Position on the Liquidator
The appellate court affirmed that the official receiver is lawfully serving as the substantive liquidator. As the High Court had noted:
“Under section 438 of the Insolvency Act, the Official Receiver automatically assumes the role of a de facto liquidator when no other liquidator has been appointed… the Official Receiver was appointed as the substantive liquidator.”
This means creditors cannot demand a separate appointment process.
Properties to Remain Under Preservation
The court rejected appeals by SPVs seeking to lift preservation orders on flagship projects, including Ridge, Applewood, Taraji, Cysuites, Riverrun, Athi River, Alma, and Mystic Plains/Newtown. Judges stressed that creditor funds had been traced into these developments:
“The SPVs were yet to demonstrate that the subject projects are independent of the funds received from CHYS’s creditors… lifting the preservation orders would significantly undermine the realization efforts being carried out by the Official Receiver.”
Cytonn High Yield Fund Places Three SPVs into Administration
The Cytonn High Yield Fund (CHYS) has placed three of its project Special Purpose Vehicles (SPVs) into administration as part of ongoing insolvency proceedings.
The affected entities are:
- Cytonn Investment Partners Ten LLP (Taraji)
- Epazec Company LLP (Applewood)
- Cytonn Investment Partners Eleven LLP (The Ridge)
The court has appointed Julius Ngumbau Mwengei to take control of the SPVs and oversee the realisation of the charged assets. Creditors have been given seven days to submit their claims for consideration in the administration process.
About the Projects
- The Ridge (Ridgeways, Nairobi): A comprehensive and luxurious mixed‑use development located in Ridgeways. The Ridge sits on 9.9 acres of land, designed to integrate residential, commercial, and lifestyle spaces.
- Taraji Heights (Ruaka, Kiambu County): A mixed‑use development valued at Ksh2.5 billion, sitting on a 2.8‑acre parcel. Taraji Heights is positioned as a modern urban hub combining residential and commercial facilities.
- Applewood (Miotoni‑Karen, Nairobi): A high‑end residential project valued at Ksh2.5 billion, featuring 18 luxury homes on half‑acre plots in the leafy Miotoni‑Karen suburb.
Bona Fide Purchasers Must Prove Title
Homeowners and investors argued they held valid titles to units within the SPVs. The court acknowledged protections for genuine buyers but emphasised the burden of proof:
“Assets purchased by bona fide purchasers for value, without notice of the company’s insolvency, do not form part of CHYS’ assets. The onus is on the applicants to demonstrate ownership and good title.”
Debt Settlement Proposal Dismissed
A debt settlement plan advanced by a group of creditors under the Creditors Restructuring Committee (CRC) was dismissed as speculative. The judges described it as:
“Little more than a colourful presentation of hope, rather than a practical and actionable plan.”
The court emphasised that liquidation, not restructuring, remains the lawful path forward.
Edwin Dande Formally Joined
Cytonn founder Edwin Dande formally joined as an interested party. The court noted his active role in the proceedings, stating that his inclusion:
“Would not cause prejudice to the Official Receiver or the creditors and is consistent with ensuring that all parties with a significant interest are included in the process.”
Too much noise about a fairly balance and keenly threaded Cytonn CHYS judgement…
1. What was A MUST we got… that there was no fraud. Correct. ✅
2. On the consent btn the Official Mortician and SBM Bank, COA said file an application to set it aside. They are correct. ✅
3.… pic.twitter.com/xwtGtzolnL
— Edwin H. Dande (@ehdande) November 21, 2025
Background: The Cytonn Collapse
Cytonn Investments, once a rising star in Kenya’s alternative investment market, raised billions through CHYS and Cytonn Project Notes (CPN). By 2021, liquidity challenges triggered the filing of Insolvency Petition No. E063 of 2021. Over 16,000 investors were left exposed when promised returns failed to materialise.
Cytonn High Yield Solutions and Project Notes Placed Under Administration
In January 2023, the High Court placed CHYS under liquidation and issued preservation orders over properties tied to SPVs. Since then, creditors have debated whether restructuring or liquidation offers the best chance of recovery. The Court of Appeal’s latest ruling closes the door on restructuring proposals and reinforces liquidation as the primary recovery mechanism.
Implications for Investors
The judgment consolidates the liquidation process under the Official Receiver, signalling that recovery will proceed through asset realisation rather than restructuring. While bona fide purchasers may still prove their claims, the ruling underscores that creditor protection takes precedence.
