MP calls for probe on dead Kenyans' fund, says it could be fraudulent

Unclaimed Financial Assets Authority Chairman Francis Njenga, Director of Pensions Treasury, Alfred Kagika, Board Member Joyce Mutegi and Managing Trustee John Mwangi during the launch of the strategic plan on February 8, 2024. [Samson Wire, Standard] Parliament has formally launched an investigation into the alleged misuse of billions of shillings worth of unclaimed assets held by the State following years of rising concerns over the reunification of the assets with their rightful beneficiaries. Nominated Senator Gloria Orwoba last week reiterated before the Senate that about Sh10 billion worth of unclaimed assets belonging to the dead could have been misappropriated including about Sh500 million she claimed as questionable auditing fees that cannot be accounted for. She consequently asked the Senate to formally investigate the management of the Unclaimed Financial Assets Authority (UFAA) - the agency mandated to reunify billions of unclaimed assets. The agency has been sitting on billions in idle cash, shares and dividends amid mounting concerns over the effective implementation of its mandate. The agency has been struggling to reconcile the growing haul of unclaimed assets to its legitimate owners according to recent State-backed Auditor General reports. Last year (2023) the authority that is headed by Chief Executive Officer John Mwangi disclosed that it is holding more than Sh60 billion of unclaimed assets. These comprise of Sh33 billion in cash and cash equivalents and 1.7 billion shares amounting to Sh30 billion. Reporting and surrender of such assets by all holders is mandatory and due on or before November 1 every year. Holders are also encouraged to file nil returns if applicable. The money is largely held by insurance companies, banks, pension schemes, law firms, mobile phone money wallets and Saccos, among others. And now Ms Orwoba wants the Senate to get to the bottom of the probe. She reckons the probe is important to protect the assets of the dead and the future of next of kin. "Mr Speaker, Sir, I rise to seek a statement from the Standing Committee on Finance and Budget on alleged financial improprieties at the Unclaimed Financial Assets Authority (UFAA)," she said on the floor of the Senate. "In the statement, the committee should establish the total amount of funds that have been remitted to the Unclaimed Financial Assets Authority (UFAA) over the last five (5) years and investigate discrepancies regarding unclaimed funds amounting to Sh10 billion that cannot be accounted for, given that only Sh1.5 billion out of Sh11.5 billion has been accounted for, and state any measures the Board has taken against the Management in the supervision of the audits," she said. She also wants the committee to establish why "UFAA incurred expenses of over Sh500 million for substandard audit services undertaken, stating the procedure used to procure the services of the audit firms and the role played by the UFAA Management in supervising these audits." Additionally, she wants Parliament to demand answers on the steps taken by the agency to determine the value of unclaimed financial assets in the form of shares that are not currently listed in the Nairobi Securities Exchange (NSE), outlining any measures taken by the authority to safeguard the shares from decreasing in value and monies made through the sale of shares by way of fiduciary duty as envisioned under Section 143 of the Companies Act. "The sad thing about this is that this is money that has been left by those who have passed on. It is literally dancing on the graves of dead people," said Senator Orwoba. The law allows the UFAA to charge any entity including banks or Saccos that fails to surrender unclaimed assets a penalty equivalent to 25 per cent of the assets held. Besides, the authority levies a penalty of between Sh7,000 and Sh50,000 for each day that the assets stayed before being submitted. The law requires the holding company to search for the rightful owners of an asset before declaring it unclaimed and forwarding it to the Ufaa. "If we are going to be prudent in terms of austerity measures, it is proper as we are looking at our expenditure in terms of money spent even here in the senate we should also ensure these state agencies, one of them being UFAA be audited to the point we can look at the extra resources this country has and how we can diversify or use those resources to help us in running the economy of this country," said Orwoba. UFAA chairman Kigo Njenga and wangi did not respond to numerous Standard queries over the alleged audit queries as raised. Mr Njenga is a former Gatundu North Member of Parliament and a former Finance Executive in Kiambu County. Mr Mwangi is set to leave office by the end of this year when his term comes to an end. Mr Njenga earlier blamed infighting between various cadre at the State agency for the emergence of the audit queries. The Standard could not independently verify his claims. Ms Orwoba's concerns over the operations of UFAA come as Auditor General Nancy Gathungu recently raised a similar red flag over the security of unclaimed assets. While the authority started receiving unclaimed assets from holders in 2014, reunification of the assets with the beneficiaries started in 2016. As of June 2022, receipts from holders were Sh22,614,997,000 while claims paid totaled Sh604.9 million representing a reunification rate of nearly three per cent of total assets remitted by holders such as banks according to a report by the Auditor General for the financial year ended June 30 2022. According to Gathungu, the authority is not meeting its mandate of tracing unclaimed assets and reunifying them with the beneficiaries efficiently and effectively. Most of the unclaimed assets are attributed to the failure of the deceased to inform the beneficiaries of the assets besides the absence of a will. Wealthy Kenyans are also said to shy away from claiming money in idle assets surrendered to the state. A big chunk of the money (60 per cent), Ufaa data released earlier showed, included deposits and cash in dormant current and savings accounts from financial institutions, especially commercial banks. Mwangi said earlier there is about Sh2 billion in uncollected mobile money funds, including M-Pesa. Ufaa has in the past put the names of hundreds of beneficiaries on its websites and published advertisments in the media for relatives and next of kin to file for claims.

MP calls for probe on dead Kenyans' fund, says it could be fraudulent

Get Full Access for Ksh299/Week.

Related Topics

Similar Articles

Latest Stories

The Standard Insider

Digger Classified

GET OUR NEWSLETTER

CONNECT WITH US

FOR THE LATEST JOB ADVERTS

Similar Articles

week reiterated before the Senate
🔥 Flash Sale — 50% Off Monthly & Yearly Plans

Offer ends in…

0Days

00Hours

00Mins

00Secs

Konza, Microsoft bank on AI skills to accelerate women in creative economy

Iran war: Why Kenyans should brace for fuel crisis despite State's assurance

Mid-East conflict, port inefficiencies hit tea exporters

Small traders and farmers set for Sh12.5b green funding

DIGGER JOBS

Digger Motors

Digger Real Estate

MP calls for probe on dead Kenyans' fund, says it could be fraudulent

Get Full Access for Ksh299/Week.

Related Topics

Similar Articles

Latest Stories

The Standard Insider

Digger Classified

GET OUR NEWSLETTER

CONNECT WITH US

FOR THE LATEST JOB ADVERTS