This archive report was first published on 22 June 2021.
Published on June 22, 2021, by financial analyst Ephraim Njega, this article highlights the red flags surrounding Cytonn Investments.
When considering the controversies surrounding Cytonn Investments, several questions come to mind. Were the company's founders corrupted by money, or is their high-yield product a victim of the coronavirus pandemic rather than an outcome of fraud?
These are deep questions, and Njega has always had issues with Cytonn from day one. He has shared these concerns in the past, and here are the key issues he identifies:
- The founders' departure from their previous employer, Britam, was unsettling, with allegations of defrauding their employer. They have denied the allegations, but their exit was not professional.
- Excessive media hype, which should raise a red flag, as it may be planted.
- Overselling and marketing hype, with the company's products being sold like commodities.
- Promising consistent above-market returns, which is unrealistic in the real estate sector in Kenya.
- Resisting regulation, with the company claiming that regulations are tailored to frustrate them.
- Odd behavior by the CEO, who responds to negative comments on social media in an unprofessional manner.
- Silencing dissent, with the company rushing to court against anyone who makes comments or raises queries they don't like.
- Disclosures, with the company's Investor Relations page lacking the expected disclosures.
- Doing too much too fast, with the company having too many products and doing too many things.
- A weak defense, with the company relying on excuses rather than showing investors the money.
