Kenya's Capital Markets Authority confirms Cytonn Investments is not a registered entity

In a surprising turn of events, Kenya's Capital Markets Authority (CMA) has confirmed that Cytonn Investments is not a licensed and approved entity. The regulator has taken a stern stance by initiating criminal investigations into Cytonn's operations and has urged affected investors to report to the Capital Markets Fraud Investigation Unit. This revelation has sent shockwaves through the investment community in Kenya as Cytonn Investments, a prominent player in the market, now finds itself embroiled in a legal storm. The CEO of Cytonn Investments, Edwin Dande, recently spoke to CNBC Africa to address these allegations. Dande expressed his skepticism regarding the CMA's statement, attributing it to an attempt to distance themselves from the challenges faced by Cytonn. He highlighted the distinction between regulated and unregulated fundraising in Kenya, emphasizing that Cytonn offers both types of products. Dande defended the company's operations, stating that they comply with the regulations set by the CMA. He further explained the nature of Cytonn's funds, such as the Cytonn High Yield Solutions, which invest in real estate and follow specific contractual agreements. Dande pointed out that real estate investments are long-term and may encounter liquidity constraints during extraordinary circumstances like the COVID-19 pandemic. The interview also touched upon previous legal battles between Cytonn Investments and the CMA, where the regulator attempted to restrict the company's activities. Dande highlighted the challenges faced by Cytonn in complying with the CMA's directives, citing instances where the regulatory body's demands were deemed unreasonable by the courts. Despite the ongoing scrutiny and legal disputes, Dande reassured investors that their funds are secure, albeit subject to market conditions. He acknowledged the uncertainty surrounding the timeline for returns but expressed optimism that investors would see positive outcomes once the markets stabilize post-COVID-19. In response to the CMA's latest move, Cytonn Investments remains resolute in defending its position and upholding its commitment to investors. The unfolding situation between Cytonn and the regulatory authorities underscores the complexities of the investment landscape in Kenya and raises questions about the regulatory environment's clarity and consistency. As the investigations progress, stakeholders will closely monitor the developments to assess the implications for investors and the broader financial market. The outcome of this investigation could have far-reaching consequences for Cytonn Investments and the regulatory framework governing the capital markets in Kenya.