Cytonn Investments Management has accused the Capital Markets Authority (CMA) of malice over its statement on Cytonn High Yield Solutions (CHYS).
In its statement, CMA is said that the CHYS is being investigated “for criminal violations” because it is unregulated.
In a subsequent statement, Cytonn clarified that CHYS private offer under Regulation 21 of the Capital Markets (Securities), and should not be mistaken for other regulated money market solutions, also run by Cytonn.
“Kindly note that CHYS was structured as a private offer within the meaning of Regulation 21 of the Capital Markets (Securities) Regulation after consultations with the regulator,” said Cytonn.
“The statement (by CMA) appears malicious and an attempt to distance itself from a real estate fund that has operated for over 8 years, and like other real estate funds globally, has had liquidity challenges given that real estate is a long-term asset and in this case is financed by short-term obligations.”
In its statement, CMA stated that Cytonn Investments is not a licensed and approved entity, urging investors who are affected by investing in unregulated products to report to the Capital Markets Fraud Investigation Unit (CMFIU), which is the Police Unit attached to the Capital Markets Authority.
“CMFIU is currently investigating the issue for criminal violations for investors in the Cytonn High Yield Solutions (CHYS). The Authority on 20 April 2020 communicated this same information to the public,’’ said Shamiah, who is the current CMA chief executive.
CMA however acknowledged that it has licensed Cytonn Asset Management Limited, which is licensed as a Fund Manager managing the following regulated funds: Cytonn Money Market Fund; Cytonn Balanced Fund; Cytonn Equity Fund; Cytonn Africa Financial Services Fund; Cytonn Money Market Fund (USD); and Cytonn High Yield Fund.
“So far CMA has not received any complaints on these regulated products,” stated CMA.
On its side, Cytonn said that CHYS is invested in 10 well-researched real estate projects, hence the investments are very safe but illiquid. Cytonn added that the respective contracts do not allow withdrawals in periods of illiquidity.
“We urge all our 30,000 investors to keep calm as we continue to address the issues making rounds in social media, and just as we have handled previous unfair administrative action from CMA, we shall also handle this particular one,” added the statement.