Firms act to comply with new assets law

PHOTO | FILE The National Bank of Kenya says it has about Sh10 million in uncollected dividends.  NATION MEDIA GROUP

By JOSHUA MASINDE jmasinde@ke.nationmedia.com
Posted  Monday, October 15  2012 at  18:57

In Summary

• Barclays Bank of Kenya, National Bank, Mumias Sugar Company, Kenya Commercial Bank, and Eveready have asked their shareholders to claim their dividends, which cumulatively run into billions of shillings
• The National Bank’s share registrar, Ms Pauline Katua, told Smart Company that the institution has about Sh10 million in uncollected dividends, although the bank is yet to come up with a comprehensive figure
• Unclaimed dividends or assets often go uncollected due to the death of the owner, change of address, loss of documentation, or ignorance
• A Retirement Benefits Authority and Unclaimed Property Asset Register survey estimates the value of unclaimed assets to stand at nearly Sh200 billion, held by different institutions including banks and the National Social Security Fund

Companies are moving fast to comply with the unclaimed assets law by issuing deadlines for shareholders to collect their assets before they are surrendered to the government.

Barclays Bank of Kenya, National Bank, Mumias Sugar Company, Kenya Commercial Bank, and Eveready have asked their shareholders to claim their dividends, which cumulatively run into billions of shillings.

Mumias is holding approximately Sh300 million in unclaimed dividends, which it could surrender to the government by October 26.

No comprehensive figure yet

The National Bank’s share registrar, Ms Pauline Katua, told Smart Company that the institution has about Sh10 million in uncollected dividends, although the bank is yet to come up with a comprehensive figure.

Eveready has issued a November 1 deadline for shareholders to claim their uncollected dividends.

Barclays said during its annual general meeting in May that it is holding Sh573 million in unclaimed dividends, which it would surrender to the government in compliance with the unclaimed assets law.

Although the Unclaimed Financial Assets Authority Act was signed into law in December 2011, Finance minister Njeru Githae is yet to appoint members to the authority’s board, 10 months later.

Members were to be named ahead of the first unclaimed assets reporting deadline of November 1.

The authority’s work would be to manage assets that have remained unclaimed for between three to seven years. These would be managed by a trust fund.

Make reasonable attempts

The fund would also be charged with the responsibility of making all reasonable attempts to track the rightful owners or beneficiaries of the unclaimed assets within 30 years, while at the same time, ensuring that they are well managed to earn income or accrue interest for the time that the rightful owners would be sought.

Unclaimed dividends or assets often go uncollected due to the death of the owner, change of address, loss of documentation, or ignorance.

Unclaimed assets may be tangible or intangible property, which has gone unsought by the rightful owners or assets where there has not been any owner-generated activity for a defined period.

In a policy paper on the governance of unclaimed assets in Kenya, the Institute of Certified Public Secretaries of Kenya (ICPSK) recommends that the Unclaimed Assets Authority needs to ensure that holding institutions keep a physical and electronic database or register of all the unclaimed property they hold.

“At the point of remitting unclaimed assets to the Consolidated Fund by holding institutions, there will also be passage of details of the owners or rightful beneficiaries of those assets.

ICPSK further says that the authority should also make efforts to alert the public about the assets they hold through campaigns, publishing the information they have in the Kenya Gazette, daily newspapers, and providing all the information on a website with easy-to-use search options.

A Retirement Benefits Authority and Unclaimed Property Asset Register survey estimates the value of unclaimed assets to stand at nearly Sh200 billion, held by different institutions including banks and the National Social Security Fund.

Valued in bank cash deposits

The amount is mainly valued in bank cash deposits, retirement benefits, insurance premiums, and dividends.

A larger proportion — 45 per cent — is held by commercial banks, with 25 per cent being in the custody of insurance firms. Pension funds hold approximately Sh40 billion in unclaimed assets.