The Court of Appeal has upheld High Court Judge Mabeya’s decision, delivering a final blow to various challengers and clearing the path for the liquidation of the collapsed Cytonn investment funds. In a landmark judgment that affects thousands of investors, the appellate court dismissed all appeals, reinforcing the authority of the Official Receiver to seize and sell assets from a network of related companies to recover billions of shillings.
The ruling, delivered on 21st November 2025 by justices Kiage, Mohammed, and Odunga, marks a definitive moment in the long-running insolvency saga of Cytonn High Yields Solution (CHYS) and Cytonn Real Estate Project Notes (CPN). The court found that the complex structure of Special Purpose Vehicles (SPVs) used by the funds’ promoters could not shield assets bought with investor money. The judgment affirmed the preservation and transfer of numerous high-value properties, including developments known as The Alma, Riverrun, and The Ridge, to the Official Receiver for sale.
A central point of contention was the legal separation of the SPVs, which appellants argued were distinct entities whose assets should be protected. The Court of Appeal firmly rejected this, finding the SPVs were “all Cytonns,” inextricably linked through shared control by promoters Cytonn Investment Management PLC (CIMP) and Edwin Harold Dayan Dande. The judges noted that the SPVs had failed to prove their projects were financially independent from CHYS. “The court would not countenance a well-orchestrated scheme of fraud, based on the intangible doctrine of separate legal personality of Companies, to defeat the lawful and constitutional rights and claims of the creditors,” the judgment stated.
The court also dismissed appeals arguing that the rights of bona fide purchasers who had bought units from the SPVs were violated. It confirmed that while assets not belonging to the insolvent company fall outside the liquidation, the responsibility lay with claimants to prove their ownership. “The burden is upon a person who wishes to have a certain property removed from the liquidation process to place before the liquidator evidence in support of that claim,” the court ruled.
Another significant challenge was against the rejection of a Debt Settlement Proposal (DSP) from a creditor faction, which they claimed promised full capital recovery. The court upheld the High Court’s view that the proposal was not viable. The lower court had previously characterised it as “devoid of supporting documentation and substantive detail,” adding that it “amounts to little more than a colourful presentation of hope, rather than a practical and actionable plan.”
The appeals had also contested the appointment of the Official Receiver as the substantive liquidator, alleging procedural flaws. The court dismissed these grounds, confirming the appointment was valid and that the Official Receiver had complied with statutory duties. The ruling solidifies the legal framework for handling complex corporate insolvencies in Kenya, demonstrating the judiciary’s willingness to look beyond corporate veils where structures appear designed to obscure the trail of creditor funds. For the over 3,000 investors who placed more than Kshs 11 billion into the Cytonn funds, the judgment signals a decisive, though likely protracted, step towards potentially recovering some of their investments through the formal liquidation process now under the control of the Official Receiver.
