State blamed for slow implementation of key law

By Lillian Aluanga-Delvaux

Kenya’s Unclaimed Financial Assets law is the first of its kind in the region.

According to the Chief Executive of the Unclaimed Property Assets Register (K) Limited, Joe Ngigi, no country on the continent has a similar legislation that outlines management of unclaimed financial assets.

“It’s a progressive law, and will ensure better management of our unclaimed assets,” says Ngigi.

But implementation of the law has been slow owing to delays in appointing the Unclaimed Assets Authority, eight months after the President’s assent.

Article 39 of the Act provides for establishment of a body mandated to trace owners of unclaimed assets that have long been held by other parties like financial institutions.

The authority is also allowed to take, purchase or otherwise acquire, hold, charge or dispose of movable and immovable property.

The board, according to the Act, shall comprise five persons appointed by the Cabinet secretary. These persons should not be public officers and must be knowledgeable in banking and investment, insurance, accounting, auditing, and law.

Among the board’s appointees will also be an individual to represent the interests of consumers of financial services, and the Permanent Secretary to the Treasury. But to date there is no indication of when this body will be set up.

To ensure money deemed unclaimed assets eventually finds its way back to owners, there will be an Unclaimed Assets Trust Fund, into which such monies will be deposited.

Management of fund

The Act also provides for penalties payable to the fund and gives leeway to the Unclaimed Assets Authority to appoint agents to assist in the re-unification of assets with the owners.

Holders, who fail to maintain records of assets as stipulated by the Act, make misleading statements on the same, and persons who willfully refuse to surrender assets to the Authority are liable to fines of between Sh50,00 to Sh1million, or jail term of not more than one year, or both.

The law also makes provisions for funds held under a life or endowment insurance policy contract, that has matured or terminated; which are deemed, abandoned if they remain unclaimed for over two years.

A similar period applies to deposits made by subscribers with utility companies to secure provision of services that remain unclaimed by owners after termination of that service.

Other areas addressed by the law include the management of assets from dissolved business entities, gift certificates or credit memos- deemed abandoned if not used in five years after becoming payable or distributable.

A credit memo refers to a list showing all the products or services that a seller had sent to a buyer, but the buyer did not receive or returned the product or denied the services.

Unpaid wages, which include those covered by unrepresented payroll cheques, allowances, and terminal benefits that remain unclaimed for over a year after becoming payable are also deemed abandoned.

In what is seen as a move to protect owners, the law mandates holders of assets to make all reasonable efforts to locate the owners and notify them of the assets.

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