Pile up of unclaimed assets spurs calls for new law

Billions of unclaimed assets are unaccounted for as the country lacks proper regulation and systems to document the property.

Assets ranging from bank deposits to dividend cheques, retirement benefits and more recently virtual money held in mobile phones by deceased persons are going unchecked as the government drags its feet on instituting relevant legislation.

There are no official figures on the amount of unclaimed assets in the country, but according to a survey by the Retirement Benefits Authority (RBA) in conjunction with the Unclaimed Property Asset Register (UPAR), nearly Sh200 billion was found to be held by different institutions in 2008.

“Our baseline searches indicated that there was almost Sh200 billion worth of unclaimed financial assets lying with more than 500 different organisations,” said Joe Ngigi, the founder and chief executive officer of UPAR.

This amount mainly included cash deposits in banks, insurance premiums, retirement benefits, and dividends.

A large amount, 45 per cent, is held by commercial banks, 25 per cent by insurance firms, while pension funds hold about Sh40 billion.

Others include shares held at the Nairobi Stock Exchange (NSE) and utility deposits to service providers such as Kenya Power and Light Company and Nairobi Water Company.

According to a survey by Business Daily, Kenya Airways had a total of Sh120 million in unclaimed dividend at the end of 2009, up from Sh34 million in 2008.

Other listed firms including banks did not report unclaimed dividends in their published accounts.

Currently, there are no laws in place to track unclaimed assets making it difficult to know how much is out there.

This hinders Treasury from constituting a fund to mop up the assets.

In 2005, amendments were made to the Capital Markets Act to set up an investor compensation fund in which all unclaimed dividend would be deposited.

This is the only fund that addresses the issue of unclaimed assets in the country.

In November 2008, a draft Unclaimed Financial Assets Bill was developed but it has not been acted on to date.

The Bill proposes legislation of unclaimed financial assets held by various institutions — known as holders.