Economy

Institutions yet to remit Sh240bn in idle assets

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UFAA chief executive officer John Mwangi. FILE PHOTO | NMG

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Summary

  • The Ufaa told Parliament that its survey revealed that various institutions are sitting on unclaimed assets including shares, dividends, bank accounts, safe boxes and insurance policies.
  • The authority said the bulk of the unclaimed assets are held by learning institutions such as universities and government bodies.
  • The authority said most Kenyans had not claimed their caution money and tender deposit cash, among others.

The Unclaimed Financial Assets Authority (Ufaa) estimates that Sh241 billion in idle and abandoned cash are yet to be remitted to the State in line with the law.

The Ufaa told Parliament that its survey revealed that various institutions are sitting on unclaimed assets including shares, dividends, bank accounts, safe boxes and insurance policies.

The authority said the bulk of the unclaimed assets are held by learning institutions such as universities and government bodies.

The authority said most Kenyans had not claimed their caution money and tender deposit cash, among others.

Ufaa said government institutions are notorious for refusing to remit unclaimed cash to the authority.

“We have a case of assets having been identified and a lack of cash to remit to the authority. It is the unwillingness of the government institution to remit these assets. There is no incentive to remit the assets. We are working on the area of enforcement to ensure that the assets are remitted,” John Mwangi, Ufaa CEO, told the Finance Committee.

Unclaimed Financial Assets Act, 2011 allows Ufaa to charge any entity that fails to surrender unclaimed assets a penalty of 25 per cent of the assets held.

Besides, the Ufaa also charges a penalty of between Sh7,000 and Sh50,000 for each day for the assets that have not been surrendered.

Unclaimed assets include money in bank accounts, which have been dormant for more than five years, bankers cheques not cashed and contents in safe deposit boxes unclaimed for more than two years.

The shares targeted for surrender are those whose owners have failed to participate in corporate actions for at least three years. The actions include attending annual shareholder meetings, collection of dividends or taking up additional shares during stock splits.

The Ufaa says it is struggling to re-unite the cash with their rightful owners or beneficiaries. It claimed the worth of assets under the Treasury’s custody is turning off some claimants. Ufaa said it is holding shares worth Sh26.3 billion that have not been claimed by owners.

“In 2016/17, we paid our first claimant following gazettement of Unclaimed Financial Assets Regulation 2016. We paid 1,014 claimants in 2016/17, 1,280 in 2017/18 and 2,570 last year.