Unclaimed assets now Government property

By Jackson Okoth

All unclaimed dividends, bankers’ cheques and cash deposits lying within the bank vaults will now be passed on to the Unclaimed Financial Assets Authority.

Pensions, cash held up within the mobile cash transfer system and safe deposit boxes for which rental fees has remained unpaid for more than two years will also be passed on to the Authority from today (November 1, 2012).

“All institutions are now required to prepare a report on the various unclaimed financial instruments in their possession,” said Vincent Kimosop, Executive Director of International Institute of Legislative Affairs. “This inventory is to be handed over to the Authority when it is formed.”

In the last month, listed companies and commercial banks have been putting out advertisements calling on their customers and shareholders to make claims on dormant assets, before the October 31 deadline.

Any claims made after this deadline will now be forwarded to the Authority. Although this authority is not yet in place, it is a legal obligation for all affected institutions to comply with these timelines.

Make report

Section 20, Part 3 of the Unclaimed Financial Assets Act requires that a person holding assets presumed abandoned and subject to the custody of the Authority as unclaimed assets under this Act shall make a report concerning the assets to the Authority.

This report shall be filed on or before the first day of November of each year.  Where the Authority is satisfied that a person is the owner of all or part of the assets that became unclaimed assets and paid into the Unclaimed Assets Trust Fund, the Authority may pay out to the owner an amount equal to the value of those assets or part of it as the case may be.

Expectations are that the Finance Minister will soon gazette the names of those appointed to the Unclaimed Financial Assets Authority.

It is still unclear how much lies unclaimed at the Nairobi Securities Exchange, which has been in operation for more than 50 years.

There are also dormant bank accounts, insurance policies, pension funds, real estate, land and moveable assets that lay unclaimed, either because their owners have passed on or inheritors have no knowledge of their existence.

When the Authority is established, it will provide legal framework for the Government to handle unclaimed assets to be passed on to rightful beneficiaries. A number of institutions holding unclaimed dividends and cash in the account include commercial banks, which have in recent months been running advertisements calling on those who own the idle assets to come forward before they are declared unclaimed, and forwarded to the Authority.

Custody

President Kibaki signed the Unclaimed Financial Assets Act (2011) into law in December last year. The law allows for the dealing and the reporting of unclaimed assets. It also establishes the Unclaimed Financial Assets Authority and the Unclaimed Financial Assets Trust Fund.

Under the new law, all unclaimed assets would be placed in the custody of the Unclaimed Financial Assets Authority.