Three businessmen have sued investment firm Cytonn over Sh46.7 million money that they had invested in the firm.
Charles Nzioki Kanyaa, Harrison Kaloki Kanyaa and Robert Munyao Kanyaa want the court to compel Cytonn to pay them back their investment cash with interest.
The three accused representatives of Cytonn of allegedly knowingly making deceptive misrepresentation to them, well aware of the true financial position of the investment firm.
They allege that on diverse dates, the representatives of Cytonn made representations to them that they would receive handsome monthly returns if they invested substantial amounts of money.
“The Defendants' representatives sketched a portrait of a liquid, stable and financially sound Cytonn which can be trusted by investors with colossal sums of monies with no history of non-payment to investors,” they claim in court documents.
Pursuant to those representations, between October 29, 2018 and October 30, 2018 they invested Sh39 million with the firm at an agreed interest rate of 18 per cent payable monthly for a period of 12 months.
Upon maturation of the investment of Sh30 million they had invested, they said that they invested another Sh42 million on November 4, 2019, due to the representations made by the representatives of Cytonns of a higher and better return at an agreed interest rate of 20 percent per annum, payable quarterly for a tenure of two years.
“The Defendants routinely and regularly paid the agreed monthly interest until June 2020 when in a fragrant breach of the investment agreement stopped paying the agreed monthly interest,” they claim in court documents.
They aver that Cytonn on or about June 22, 2020 wrote to them an email seeking to unilaterally vary the contractual investment terms.
“Being dissatisfied with the unilateral alteration of contractual terms, we wrote to them through our advocates seeking a refund of the principal sum plus all accrued interest thereof, which as at 31 December, 2020 amounted to Sg46, 792,603,” they said.
According to them, Cytonn responded on January 29, 2021, citing temporary liquidity of the fund and for the very first time in their contractual relationship cited in partnership agreement as the governing document of the fund.
According to the businessmen, Cytonn is in utter breach of the investment agreement and wants the court to grant them compensation for violating their consumer rights.