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The Nairobian

State supports Bill on access to unclaimed billions

Business

By The Standard Business | Aug 12, 2011

By Alex Ndegwa and Steve Mkawale

The Government has backed a Bill that will allow it access to Sh9.1 billion held by financial institutions as unclaimed assets.

Finance Assistant Minister Oburu Odinga declared the Government would support the Unclaimed Financial Assets Bill sponsored by Laisamis MP Joseph Lekuton. The Bill is unpopular with commercial banks and insurance firms that control a huge chunk of such assets.

Oburu said a taskforce established in 2008 by the ministry to ascertain the nature, extent and value of unclaimed assets in the country put the figure at Sh9.1 billion.

The figure is far less than the estimated Sh200 billion but Oburu explained it could be much higher, blaming the big difference on inaccurate reporting.

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According to the taskforce report, Oburu said commercial banks held the largest share of Sh7.4 billion, listed public companies Sh1.4 billion, NSSF Sh243 million and insurance companies Sh200 million.

The minister said the Sh9.1 billion may be inaccurate because of under reporting by NSSF and public trustees. The Bill seeks to establish an authority to receive the unclaimed assets and regulate usage. Oburu said unclaimed assets offered huge non-taxable revenue, which can be used for financing long-term development like infrastructural development.

Legal framework

Rangwe MP Martin Ogindo said many Kenyans die intestate, adding that insurance companies and banks would oppose the move and create a legal framework to free those assets as they benefited the most from such assets.

"There are a number of people whose lives are ruined because there is no mechanism to unite them with what would ordinarily be bequeathed to them," he said.

Lari MP David Njuguna said the funds could be channeled to the education sector to fund construction of new national schools in the counties.

Eldoret South MP Peris Simam said it was unfortunate that families live in squalor after the death of their breadwinners if they hadn’t disclosed their property.