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Capital Markets

Court blocks CMA order on Cytonn unit trust

Edwin Dande
Edwin Dande, Cytonn’s chief executive. FILE PHOTO | NMG 

A High Court judge has suspended a directive by the Capital Markets Authority (CMA) barring Cytonn Asset Managers from bringing in new clients.

Justice Grace Nzioka on the eve of the New Year also directed the parties to appear before her on January 17 to argue the matter.

In a letter dated December 20, the regulator had said it would discontinue Cytonn Asset Managers on boarding of new clients starting this month if the firm is unable to secure a new trustee to manage the fund.

However, Cytonn argued that the decision was malicious because it had not given a chance to inform its investors, who would be affected by the sudden halt of the activities of the trust.

In his application in court, Cytonn CEO Edwin Dande said it was incumbent upon Cytonn Asset Managers and CMA to appoint a new trustee, failure to which the outgoing trustee (Co-operative Bank Ltd) was obligated to appoint within two months, a qualified company selected by it as a new trustee.

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Cytonn had not appointed a new trustee by October 2019, and through a meeting convened on November 6, 2019 between them and the regulator, Mr Dande said it was resolved that Co-operative Bank would facilitate the appointment of a qualified company.

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