The Unclaimed Financial Assets Authority (UFAA) has started auditing institutions holding unclaimed assets to determine whether they are making full disclosures in their submissions to the regulator.
The authority will also pursue institutions known to have unclaimed financial assets but are yet to declare them with a view to charging them for non-compliance.
The UFAA said Monday it is partnering with fellow regulators when carrying out the audits on holders of unclaimed assets, with the process already underway for institutions that have already submitted some of the unclaimed assets in their possession.
UFAA chief executive Kellen Kariuki said the authority is focussing on cases of inconsistencies between the reported unclaimed assets and the financials of the reporting firms rather than carrying out blanket audits.
“We will partner with the other regulators like the Central Bank of Kenya, the Insurance Regulatory Authority, Capital Markets Authority and the Sacco Societies Regulatory Authority. We are going to get the schedule of audits that they will undertake with the various holders and we will go with their inspectors to inspect those organisations,” said Ms Kariuki.
A large number of institutions, especially banks and insurance firms, have been complying with the requirements of the Unclaimed Financial Assets Act 2011 and submitting unclaimed resources the authority.
However, there has been no verification done to ascertain whether they have reported all or part of the unclaimed assets in their possession.
The UFAA expects though that even with audits it may not get all the undeclared financial assets since some records, dating back decades, may not be available.
The UFAA has received over Sh6 billion from companies holding idle resources, with banks having submitted the bulk of the amount at 65 per cent.
It is targeting to have accumulated assets worth Sh12 billion by June next year.
The authority has received over 1,700 claims for Sh42 million, with payments expected to start within the next three weeks following the passage of regulations guiding the pay-outs.
The payments is likely to boost the level of public awareness of the presence of unclaimed assets in Kenya, resulting in a rise in the number of claims.
The law forming the authority was passed in 2011 but a delay in passage of supporting legislation has delayed the execution of its key role of reuniting unclaimed assets with their legal owners.
The legislation also spells out tough penalties for institutions which knowingly fail to remit unclaimed assets in their holding.
“If they don’t make full disclosures and we find out that they are culpable then we will definitely enforce the law and they will pay penalties, which are very punitive,” said Ms Kariuki.
According to the Act, an institution which fails to deliver unclaimed assets within the prescribed time is required to pay UFAA interest at a monthly rate of one percentage point above the prime rate per month on the value of the assets from the date they should have been delivered.
Further, any institution which wilfully fails to report the assets under its holding is liable to pay a penalty of between Sh7,000 and Sh50,000 for each day the report is withheld.