Cytonn Investment Management PLC v Official Receiver (Civil Appeal E923 of 2024) [2025] KECA 1989 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that calling Cytonn's conduct 'akin to fraud' was not an actual finding of fraud, and dismissed the company's appeal.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the learned Judge erred in concluding that the activities of the appellant and its promoters amounted to a scheme akin to fraud when no fraud claim was pleaded, investigated or determined and no evidence of fraud was adduced
- 2.Whether the learned Judge's finding of fraudulent conduct demonstrated prejudgment and bias, premised on personal opinion rather than a lawful determination supported by evidence
Key legal issues
#Whether the High Court's description of the appellant's activities as a scheme 'akin to fraud' amounted to an impermissible finding of fraud
The characterisation was not a finding of fraud and the Judge could not be faulted; the appeal grounds failed
The Court adopted verbatim its reasoning in the consolidated Cytonn appeals. The entities collected public funds into baskets, on-lent them to SPVs without the intended legal charges securing the 'loans', and a guarantee was executed in favour of investors. The proposed Administrator had been retained before appointment without disclosure, and recommended winding up. Looked at holistically, describing this conduct as akin to fraud was a permissible judicial conclusion and not a determination of fraud, so the fraud standard of proof was never engaged.
Whether the learned Judge's remarks demonstrated prejudgment and bias against the appellant
No bias was established; the Judge 'chose his words carefully' and the conclusion was a lawful one on the facts
The Court agreed with the respondent that the Judge deliberately used the phrase 'akin to fraud' rather than making a finding of fraud. Because the characterisation was grounded in the undisputed factual matrix (pooling of investor funds, unsecured lending to related SPVs, and non-disclosure concerning the Administrator), the suggestion that it rested on personal opinion or prejudgment was rejected. The appellants' bias ground therefore fell away with the first ground.
Legal principles established
#- A judicial characterisation of conduct as a scheme 'akin to fraud' is not an express finding of fraud, and therefore the stringent standard of proof required for findings of fraud does not apply to such a characterisation
Court orders
#- 1.The appeal is dismissed with costs
- 2.It is so ordered
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya
- Jurisdiction invoked
- First appeal to the Court of Appeal from the High Court (specific provision not stated in the judgment)
Relief refused
#Declaration that no determination of fraud has been made against any registered Cytonn related entity or their promoters, and that they are not considered fraudulent entities and their workings are not akin to fraud
The Court adopted its reasoning in the consolidated Cytonn appeals: the Judge described the conduct as a scheme akin to fraud, not an express finding of fraud, and could not be faulted on the facts
Costs
Appeal dismissed with costs (costs to the respondent).
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
This appeal fails and is dismissed with costs.
Looked at wholistically, the learned Judge cannot be faulted for arriving at that conclusion which was not the same thing as saying that they two entities were involved in fraud.
Sine there was no express finding of fraud the stringent standard of proof required in findings of fraud was not applicable.
It is so ordered.
Issues in the judgment
#Apparent typographical error in the quoted passage: 'Sine' where 'Since' is intended
Internal inconsistency in the quoted passage from the consolidated appeal: 'the 3rd respondent' appears where the context ('The prime movers of the two entities were the 3rd appellant and Edward Dande') suggests 'the 3rd appellant' is meant
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Cytonn Investment Management PLC v Official Receiver (Civil Appeal E923 of 2024) [2025] KECA 1989 (KLR)", Case Analysis (2025). Civil Appeal No. E923 of 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1989/eng@2025-11-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.