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MPs to quiz CMA boss over Cytonn investors’ queries

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MPs during a session at Parliament chambers. PHOTO | FILE

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Summary

  • The CMA recently said it has opened investigations into Cytonn High Yield Solutions (CHYS) and Cytonn Project Notes (CPN)—which have investments worth Sh13.5 billion.
  • The agency does not regulate the two funds, which have failed to pay investors upon maturity of their investments in properties developed by Cytonn.

Parliament has summoned the Capital Markets Authority (CMA) chief executive Wyckliffe Shamiah in the wake of mounting complaints from investor reports of delayed payment of returns from Cytonn real estate investments.

The Finance committee wants to question the CEO and the person holding the role of chairman following a petition from Garissa Township MP Aden Duale to probe the regulator following the proliferation of unregulated and illegal investment funds that have led to loss of investor funds.

“At its 45th sitting held on June 23, 2021, the committee…resolved to invite the chairperson and the chief executive officer of the Capital Markets Authority for a meeting to discuss issues raised in the said statement,” National Assembly Clerk wrote in a letter dated June 30, 2021 to CMA.

The tenure of billionaire businessman James Ndegwa as chair of CMA came to an end in April.

The letter, which is also copied to the Treasury Principal Secretary Julius Muia and Mr Duale require Mr Shamiah and chair to appear before the Finance committee on Thursday July, 8 at Continental House. Philip

“You will be required to prepare a comprehensive report on the issues raised which should reach the committee on or before Wednesday July 7, 2021,” Jeremiah Ndombi, the Deputy Clerk wrote.

The CMA recently said it has opened investigations into Cytonn High Yield Solutions (CHYS) and Cytonn Project Notes (CPN)—which have investments worth Sh13.5 billion.

The agency does not regulate the two funds, which have failed to pay investors upon maturity of their investments in properties developed by Cytonn.

The company has been marketing the funds as private placements, a closed shop of a few sophisticated investors, which do not fall under the ambit of the CMA. But filings in court show that Cytonn had raised money from 3,000 investors in breach of regulations that demand funds raised through private placements to involve less than 100 people.