Barclays Bank unclaimed dividends hit Sh573 million
Unclaimed dividends held by Barclays Bank of Kenya stood at Sh573 million in December from Sh384 million and Sh148 million in 2010 and 2009 respectively, adding to the pile of assets held by various institutions whose owners cannot be traced. Photo/File
Unclaimed dividends held by Barclays Bank of Kenya has crossed half a billion shilling mark and the bank is seeking shareholders’ approval to transfer the cash pile along with deposits whose owners cannot be traced to the government.
The unclaimed dividends stood at Sh573 million in December from Sh384 million and Sh148 million in 2010 and 2009 respectively, adding to the pile of assets held by various institutions whose owners cannot be traced.
Barclays Bank chief executive Adan Mohamed told the Business Daily earlier that the bank had to authenticate legitimate claimants to avoid paying out fraudulent claims.
“We can’t just pay out the unclaimed dividends without ensuring we are paying the right person. We have had to reimburse genuine beneficiaries when fraudulent persons came to receive the money,” said Mr Mohamed.
Unclaimed assets held by banks, listed companies, pension funds, insurers, stockbrokers and other institutions are estimated to have soared to Sh200 billion, prompting the enactment of the Unclaimed Financial Assets Act that seeks to provide a legal framework to handle the funds.
The law came into force in December, but the government is yet to establish the Unclaimed Financial Assets Authority that will manage the funds.
Barclays Bank plans to ask its shareholders at the June 6 annual general meeting to allow it transfer the unclaimed assets to the authority once it’s established within the year.
“The introduction of the new article ensures Barclays is ready to implement the instructions we expect will come from the authority once it has been set up,” Yusuf Omari, the bank’s chief finance officer said on Wednesday.
Institutions insist on stringent verification criteria for claimants thereby shutting out some deserving cases.
The asset recovery law states that banks will surrender to the authority deposits that have been unclaimed for five years.
Travellers ‘cheques and money orders that go unclaimed for two years after issuance are also to be surrendered.
Banker’s cheques and drafts paid to banks or other financial institutions and whose payments are outstanding for more than two years will also be regarded as unclaimed.
The authority will also manage unclaimed assets held by pension funds, insurers and stockbrokers. The holder of the assets is obligated to try and locate owners —with a condition that they write to them prior to delivering the assets to the Authority.
The authority assumes their ownership upon receiving the assets and relieves the initial holder (institution) of any liability that may arise in the event of future claims.
Many listed companies forfeit the unclaimed assets such as dividends to the Investor Compensation Fund — which is run by the Capital Markets Authority — after a seven-year holding period.
In 2008, unclaimed dividends at Barclays stood at Sh154 million, which was a drop from Sh174 million in 2006.
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