SBM Bank Secures Priority in Sale of Cytonn’s Ruaka Development to Recover Sh650 Million Loan

SBM Bank has secured priority rights in the sale of The Alma, a Cytonn-backed residential project in Ruaka, to recover a defaulted loan of Sh650 million dating back six years. The High Court affirmed the bank’s authority to enforce its security interest over the property owned by Cytonn High Yield Solutions.

The Alma development spans 4.67 acres and includes nine blocks with 477 apartments ranging from one to three bedrooms. The estate features a commercial centre, swimming pool, gym, nursery, playgrounds, and over 300 parking bays.

Court Ruling Protects Early Buyers, Enables Bank’s Recovery

The court ruled that buyers who completed full payment for their units before SBM Bank registered its charge in August 2019 are entitled to have their apartments excluded from the liquidation sale. However, purchasers who acquired units after the charge registration must be aware that the property was encumbered and remain subject to sale by the bank to recover outstanding debt.

"Any homeowner who proves full payment before August 23, 2019, can exclude their unit from sale," the court stated, but added that those buying after this date were expected to conduct due diligence at the Lands Registry.

Setbacks for Investors and Homeowners

The ruling was a blow to over 25,000 investors represented by Paul Opiyo, who sought to join the liquidation proceedings on their behalf. The court dismissed this application, noting that the matter was already before the Court of Appeal.

Similarly, 110 homeowners who tried to halt the bank’s recovery efforts failed to provide sufficient proof of payment; sale agreements alone were deemed inadequate evidence.

Background on Cytonn High Yield Solutions Liquidation

Cytonn High Yield Solutions was placed under liquidation in January 2023 after failing to implement a rescue plan. The Court of Appeal upheld the liquidation in November 2025, enabling the Official Receiver to manage and realise assets for creditor benefit.

The Alma, valued at approximately Sh1.43 billion, is among several properties preserved for liquidation, alongside Kilimani (Sh1.73 billion), Amara Ridge (Sh502.8 million), Superior Homes (Sh383.9 million), and others.

Ongoing Insolvency Proceedings

The High Court also dismissed attempts by Cytonn Integrated Project LLP to overturn a consent agreement between SBM Bank and the Official Receiver, which formalized the bank’s secured recovery rights over The Alma.

The insolvency process continues, with the Official Receiver actively pursuing creditor claims and asset recovery.