A businessman has moved to court seeking liquidation of property dealer Cytonn Investment Management Plc over failure to settle a Sh14 million debt.
Mr George Kirigi Thogo, in an insolvency petition filed at the High Court in Nairobi, says the company is indebted to him for a sum of Sh14,264,538 being the principal amount and interest. The money is still earning interest.
On diverse dates between October 18, 2019 and February 7, 2020, Mr Thogo entered into a top-up, also known as Further Investment Agreement with Cytonn, having previously invested with the company.
The money was under an investment plan described by Cytonn as High Yield Solution (HYS) Scheme. Mr Thogo invested Sh12,994,883 in three tranches of Sh7 million, Sh4 million and Sh1,994,883. The Sh7 million had a maturity date of October 26, 2020, at an agreed return rate of 19 per cent.
Mr Thogo, who doubles up as a farmer, also invested Sh4 million with a maturity date of April 27, 2020 at an agreed return rate of 16.5 per cent and later, ShI,994,883 with a maturity date of August 10, 2020 at an agreed return rate of 16.5 per cent.
However, on April 1, Cytonn sent the businessman a statement indicating that it had adjusted the maturity dates of his investment.
For instance, the maturity date for the Sh7 million was pushed from October 26, 2020 to April 1, 2021.
Upon demanding the release of his funds in full together with interest, the company said it had “powers to unilaterally amend the terms of the agreement”.
On June 3, 2020, Cytonn told the investor that it had postponed its obligations (of returning the funds and interests) because the real estate market where it had invested the money had gone through some challenges, which had made it impossible to refund Mr Thogo's money.
“Although the company had indicated that it was willing to hold discussions and resolve the matter amicably, no proposals have been forthcoming,” reads the petition filed through Kiarie Kariuki & Githii Advocates.
Mr Thogo adds that all his phone calls to various representatives of the company are met with different stories, which take him round in circles with no real intention of settling the matter.
“In these circumstances, there is statutory presumption that the company is unable to pay its debt and is therefore consequently liable to be wound up,” says Mr Thogo.
He wants the company, incorporated on September 12, 2014, to be wound up by the court under the provisions of the Companies Act and an official receiver be appointed as a provisional liquidator.
Mr Thogo also wants the outstanding amount, together with interest and the cost of the insolvency petition granted to him and paid out of Cytonn’s assets.
The petition indicates that nominal share capital of the company is Sh15 million divided into 40,000,000 Class A shares of Sh0.10 each and 110 million Class B shares of Sh0.10 each.