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Agency gives firms 30 days to remit unclaimed assets

Unclaimed Financial Assets Authority chief executive Kellen Kariuki speaks at the Stanley Hotel in Nairobi on September 30 on public awareness campaign to run in October. PHOTO | SALATON NJAU
Unclaimed Financial Assets Authority chief executive Kellen Kariuki speaks at the Stanley Hotel in Nairobi on September 30 on public awareness campaign to run in October. PHOTO | SALATON NJAU 

Companies holding unclaimed assets have been given a month to submit them to the government or be penalised.

The Unclaimed Financial Assets Authority (UFAA) said on Wednesday it would impose the penalties this year after giving a four-year grace period for companies to comply.

“The Act came to being in October 2011 so holders of unclaimed assets have no excuse not to surrender – we will impose the penalties” said chief executive Kellen Kariuki.

Companies are required to submit unclaimed assets in their books as at the end of June each year to the authority by the first day of November of the same year.

Failure to forward the assets attracts a penalty equal to 25 per cent of the value of the assets that should have been submitted.

The authority said institutions which were not sure of the asset value they were holding would be allowed to submit what they were certain of before the deadline and seek a two-month extension to surrender any remaining amount.

Some of the assets that are considered unclaimed include cash in bank accounts for a period exceeding five years without any owner-initiated activity such as withdrawal or request for a statement.

Other unclaimed assets include bankers cheques not cashed for two years, contents in safe deposit boxes unclaimed for more than two years, court awards exceeding two years, and utility deposits held for over two years since termination of services.

Matured life insurance policies unclaimed for more than two years and shares, whose dividends have not been collected for more than three years, are also in the list.

The authority has collected Sh3.4 billion and expects to double the amount by end of the year should there be compliance with this year’s deadline. Banks have submitted the bulk of the assets at 62 per cent of the total.

Ms Kariuki said the authority had expected higher collections from insurance companies, pension schemes, saving societies, saccos and government institutions but there was low compliance levels in those sectors.

The law gives the authority powers to audit any premise to ensure compliance. It also compels the institutions to provide information to the authority.

Organisations that have complied include KCB Group which has remitted the highest sum of Sh700 million, Standard Chartered with Sh500 million, the defunct Kenya National Assurance Corporation Sh340 million and Barclays Bank at Sh200 million.

Regulations on the unclaimed financial assets are yet to be passed by Parliament. The authority, however, maintained companies have to comply with the Act because the rules were to give guidelines on how the authority was to pay out collected funds and not how the holders were to submit the assets.

The Kenya Bankers Association (KBA) supported the UFAA’s position urging its members to observe the deadline.

“The regulations are yet to be published and various institutions may be waiting to ensure consistency in compliance, however, this should not deter reporting and remitting unclaimed funds, particularly now that the authority is operational,” said chief executive Habil Olaka.

Upon receiving the assets, the authority’s first mandate is to search for the legal owners of the assets or their heirs — in cases where the owners are deceased.

The authority has not paid out any of the beneficiaries who have laid claim of assets forwarded to them due to absence of the regulations. The beneficiary have, however, been given an undertaking to be paid once the guidelines are approved.

Claims from the fund, so far, have been low and are estimated at Sh32 million.

The authority is pushing to have unclaimed assets held by companies disclosed in financial reports to ease tracking. Public listed companies have been disclosing unclaimed dividends but other assets remain confidential.

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