This archive report was first published on 6 January 2020.
January 6, 2020 - The Capital Markets Authority (CMA) has taken a drastic measure against Cytonn Asset Managers Limited and Cytonn Unit Trust, ordering them to stop onboarding new members. This move comes after the firm failed to secure a new trustee, a requirement for Collective Investment Schemes.
According to court documents, Cytonn had appointed Co-operative Bank as the trustee in August 2019, but the bank resigned barely a year into the deal. Despite efforts to find a replacement, none of the other four approved banks expressed interest in the deal.
Cytonn's Chief Executive and Managing Partner, Edwin Dande, has accused the regulator of economic sabotage and ill motive, arguing that the move would lock the firm out of the market and cripple its operations. In a court filing, Dande stated that the directive would spark 'an economic crisis' at the firm, with widespread effects on employees and investors.
The CMA had given Cytonn up to December 31 to secure a new trustee or cease operations. However, the firm still had not secured a trustee by the deadline, prompting the regulator to take action.
Cytonn has since sought legal redress, arguing that the regulator's directive violates their constitutional rights to fair administrative action and the common law principle of natural justice.
