The High Court has this morning issued orders setting aside the directives issued by the Capital Markets Authority, CMA, which were directing Cytonn to change its name within 30 days or stop onboarding new clients.
In early August, CMA had directed the licensed fund manager to change its name saying the directive is in line with the Capital Markets Act. According to CMA’s Chief Executive Wyckliffe Shamiah, the name
“The name change will do away with the confusion caused by the similar name used by the unregulated Cytonn Investment Management Ltd,” CMA Chief Executive Wyckliffe Shamiah had said in a statement.
It is not clear what CMA was looking to achieve with the change of name directive. Speaking to a Cytonn client, she wondered, “But CMA wants them to change their name to what now? They are Cytonn, which would be deceitful because we know we are invested in Cytonn Money Market Fund, and we are happy with it. CMA should at least meet with our clients to explain to us why they want a name change? We don’t understand the issue.”
Cytonn claims that this was an act of economic sabotage from CMA. Reached for comment, Edwin Dande, the Cytonn CEO said, “This was just another act of economic sabotage. CMA is so unlawful, so unprocedural, that they cannot win anything in a fair court. Given their demonstrated commitment to economic sabotage, I am sure they are drafting the next illegal directive, we are waiting for it. How do you call people out of maternity to appear physically within 24 hours and then proceed to sanction them for asking for a rescheduling?”
“I am beginning to wonder whether someone there is somehow gaining something from issuing these frivolous directives. They issue directives fully knowing they are illegal and won’t stand the faintest court scrutiny. It’s really strange.” Added Dande. via Soko Directory
Dannde has been writing a series of tweets t explain Cytonn’s position vis a vis CMA’s. Here is one
Lacks a good grasp of Capital Markets.Part 3 was to be about Mr. Shamiah’s contradictory positions on Private Offers/Unregulated products.
But I decided to first demonstrate that he seems to lack a good grasp of capital markets, hence probably does not understand private offers.
When asked by Adan Duale, MP: “What is the total number of all the unregulated capital markets products in the country and the number of investors in the said products?”
Shamiah’s response on page 13 of the July 6th, 2021 report to the Parliamentary Finance Committee was that “most unregulated products are operated in obscurity and therefore it is impossible for CMA to maintain a record of such.”
Just do a simple google search on unregulated investment products in Kenya, you will find a list of those products. And get this, the biggest packager and distributor of unregulated products is a licensee of CMA, I won’t name them out of courtesy.
Below is a list of some unregulated products, an industry that CMA purports to be operating in obscurity. It appears the aim was to try and mislead the committee that only Cytonn sells unregulated investment products.
- Car & General Short Term Note Program
- ASL Credit Short Term Note Program
- KK Security Short Term Note Program
- Premier Credit Note Program
- Watu Credit Note Program
- My Credit Note Program
- Maiyan Holdings
- Heri Homes Capital LLP
- Cytonn Projects Notes (CPN)
- Two Rivers Development CP Programme
- Meru Greenwood City Equity
- Cytonn High Yield Solutions (CHYS)
- Britam Wealth Management Fund LLP
Collectively, they manage more funds than the regulated Collective Investments Schemes, how can they be obscure?
A competent CEO of a Capital Markets Authority ought to know that Private Offers are legal and constitutional (debate for another day), hence focus on disclosure and transparency.
To try and project them as illegal simply to discriminate against some players just reinforces it’s a discriminative agency.
The man does not understand capital markets, he is a clear and imminent danger to our capital markets, and he must go home; not because I said so, but purely on the merit of the facts. It’s just a matter of when and how.