Several companies have recently come out to ask Kenyans to collect billions of shillings worth of unclaimed financial assets in their custody.
Surprisingly, the response to the calls to claim the more than Sh16 billion in assets has remained sluggish—pointing out the irony of individuals who continue to languish in poverty despite saving for a long time and accumulating a fortune which they fail to claim.
Analysts have blamed the pile-up of unclaimed assets in the country on poor documentation, lack of information and windy procedures involved in claiming the assets, especially in instances where the principal holder is dead or retired.
The most affected are poor Kenyans who seldom document their assets in terms of a will and get access to very little information making it difficult for their families to follow up in case one is deceased or when they retire due to old age.
A recent research by C & R, a share registry company that has existed for 30 years, found that 92 per cent of investors at the Nairobi Securities Exchange (NSE) do not have a will.
Out of 586 cases of share transfers due to death, C & R found only 45 had a will, the bulk of which belonged to Kenyans of Asian descent. Of 41 transitions among Asians 30 had wills compared to 10 among 538 deaths of indigenous Kenyans.
Pradeep Paunrana, managing director of Athi River Mining who inherited 18 per cent of the company, notes that the Indian business community have adopted efficient asset management and declaration that has helped to curb pile-up of unclaimed wealth.
“We have communities, for example Oshwal Economic Council for the Shah community where these things (will-writing) are discussed at the community level and information given,” said Mr Paunrana.
“So many families have been in fights after death and there have been experiences within the community of infighting when there is no will or clear-cut separation so most families have sought clarity through separation,” he added.
Absence of a will and lack of knowledge has resulted in accumulation of idle assets in the country , forcing the government to form the Unclaimed Financial Assets Authority (UFAA) to hold such resources.
Lack of written wills
“I have a will – a simple will that allows transfer of assets,” Mr Paunrana disclosed.
James Theuri, chief executive of C & R Group on the other hand had no will at the time of launching the report. He says he has since drafted one.
Lack of written wills among Kenyans has been largely attributed to cultural fears around the subject of death, leading to bruising succession battles in and outside the courts.
Kenyans have recently witnessed court and physical battles among wealthy families following the death of their patriarchs.
Some of those fighting over wealth include the families of late politicians Njenga Karume and Mbiyu Koinange, businessman Stephen Kagiri Kung’u, former spymaster James Kanyotu and former Attorney-General Matthew Guy Muli.
Notably, even where the family does not conflict over the sharing of the wealth, it takes more than a year for the property to pass on where there is no will.
Dependents of a deceased have to physically go before a public trustee and together swear an affidavit marking their approval of an agreed formula of sharing wealth where there is no will.
The heirs are usually eager to follow up on cash in bank and land ownership over other assets such as shares whose existence is hard to know unless voluntarily disclosed by the owner. Most of the listed companies have recently amended their articles of association to facilitate the surrender of idle assets in the possession to the authority.
The authority is obligated to pay out the unclaimed asset to a claimant as received from the principal holder without interest.
On June 10, listed investment firm Centum issued a list of over 9,000 investors whose dividends would be transferred to the Unclaimed Financial Assets Authority at the end of the month.
Notably Centum has not paid a dividend since 2009 indicating the dividends being transferred to the authority have not been claimed for more than seven years .Centum submission of the unclaimed dividends will equal surrendering the underlying shares.
UFAA Act indicates shares and dividends are deemed unclaimed if no action is taken on them by an investor for a period exceeding three years indicating.