SBM Bank has secured priority rights to recover a Ksh650 million loan from The Alma residential development in Ruaka after the High Court upheld its security interest over the Cytonn-backed project.
The Alma sits on 4.67 acres and comprises 477 apartments, a commercial centre, swimming pool, gym and more than 300 parking spaces. The ruling allows SBM to enforce its charge over the property, which was registered in August 2019.
However, the court protected buyers who can prove they fully paid for their apartments before the charge was registered, allowing those units to be excluded from any sale.
Buyers who purchased units after August 23, 2019 were not granted similar protection, with the court noting that the bank’s charge was a matter of public record and should have been discovered through due diligence.
The ruling is a setback for more than 25,000 Cytonn investors and over 100 homeowners who sought to block the bank’s recovery efforts. Cytonn High Yield Solutions was placed under liquidation in 2023, with creditor claims exceeding Ksh11 billion.
