Cytonn Integrated Project LLP has failed in its bid to stop SBM Bank (K) Ltd from auctioning part of its property in Ruaka, Kiambu County, to recover a debt exceeding Sh1 billion.
The Court of Appeal dismissed the Cytonn’s application seeking to bar the lender from selling or transferring the property pending the determination of an intended appeal.
The real estate company had also sought orders restraining the bank from collecting rent or interfering with the management of the development.
In rejecting the application, the appellate court held that Cytonn was attempting to reopen issues that had already been determined in an earlier case.
The judges further noted that Cytonn did not dispute owing the bank money or that the property had been charged as security for the loan facilities.
“Any findings in its favour by this court after the exercise of the statutory power of sale can be adequately compensated with damages,” the court said.
The dispute stems from a real estate investment structure in which Cytonn High Yield Solutions (CHYS) and Cytonn Real Estate Project (CPN) raised funds from investors and channelled them through special purpose vehicles (SPVs), including Cytonn Integrated Project LLP, to finance developments such as The Alma project in Kiambu County.
In 2019, Cytonn secured a Sh650 million construction loan from SBM Bank, backed by a first-ranking legal charge over the property. The lender later extended additional facilities, including a further charge of Sh129 million and a fixed and floating debenture of Sh779 million, with the disputed property offered as security.
Liquidation battle
Cytonn High Yield Solutions LLP was placed under administration in October 2019. The High Court later placed the SPVs under liquidation and issued preservation orders over their assets, including the Ruaka property.
In 2023, the High Court allowed SBM Bank to exercise its statutory power of sale. Cytonn challenged the decision, but the application was dismissed in November 2025, with the court affirming the validity of the preservation orders and the liquidation process.
A fresh application filed by Cytonn to stop the sale suffered a similar fate in December 2025. The court held that SBM was lawfully pursuing recovery of its funds and that Cytonn’s rights remained subject to the ongoing liquidation proceedings.
Cytonn argued that it risked losing the property unless the court intervened. The SPV also maintained that Cytonn Integrated Project LLP was a separate legal entity from Cytonn High Yield Solutions and that the preservation orders issued by the High Court were unlawful.
SBM opposed the application, alleging that Cytonn diverted Sh672.5 million from apartment sales to other banks instead of remitting the proceeds to SBM as required under the loan agreement.
The lender further argued that the application was merely a tactic to delay recovery efforts and conceal failures to meet repayment obligations.
Official receiver Mark Gakuru also opposed the application, saying the orders sought would prejudice more than 3,000 investors who have been waiting for the realisation of their investments since January 2023.
While placing the firms under liquidation in 2024, the High Court observed that investors in the collapsed entities continued to suffer as the promoters, partnerships and SPVs moved from one court to another, delaying accountability.
