Standoff between Cytonn, regulator takes new twist

Thursday, August 19th, 2021 00:00 |
Capital Markets Authority (CMA). Photo/Courtesy

Cytonn Investments and Capital Markets Authority (CMA) standoff took a new twist after the firm petitioned Parliament to remove the regulator’s boss Wycliffe Shamiah, from office.

Cytonn wrote to Shamiah last week warning him that it intended sue him and have him removed from office for making defamatory remarks which puts its Sh20 billion worth of investments at risk.

Through its lawyer, Apollo Mboya, Cytonn in conjunction with the Capital Markets Reform for Kenya Forum has accused Shamiah of demeaning his office, contravening the constitution, favouritism, and deliberately portraying Cytonn in bad light.

“Your petitioner therefore states that the deliberate acts of commission and omission by Mr Wycliffe Shamiah are contrary to the constitutional article 10- national values and principles of governance, article 232- values and principles of public service, chapter six- leadership and integrity all aimed at portraying Cytonn as an opportunistic investment partner intent on unfairly taking advantage of its investors and the public and tilting the market in favour of a few players that it appears may be connected to him,” reads the petition in part.

“Wherefore, your humble petitioner pray that Parliament,  the Cabinet Secretary to the Treasury take appropriate action for removal from office of Wycliffe Shamiah as the Chief Executive Officer of Capital Markets Authority,” it adds.

In the nine page petition, Cytonn accuses CMA of engaging in various acts of omission and commission including promoting policies that favour the banking sector while stifling capital markets, a move that has seen Kenyans acquire 99 per cent of their funding from banks and only one per cent from the market.

Kenyan investors

They also accused Shamiah of failing to protect Kenyan investors resulting in a loss of Sh180 billion in the regulated market in recent years.

The petitioners also accuse Shamiah of targetting former Britam employees, Edwin Dande, Elizabeth Nkukuu and Patricia Wanjama and condemning them unheard in a March 2019 meeting.

“To further divert attention from the regulatory failures, he has abused the criminal justice system by filling frivolous criminal complaints against select private offers players,” says the petition. In total, the petition lists 19 acts of commission and omission against Shamiah.

Cytonn and CMA have been feuding over an unregulated product, Cytonn High Yield Fund, the investments manager has been offering since 2016.

Efforts to have the product placed under regulation have bore no fruits with both sides trading accusations.

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