Treasury allocates cash for Unclaimed Assets Authority

A man counts bank notes. Local companies hold an estimated Sh200 billion worth of unclaimed assets. Photo/Fredrick Onyango 

By GEORGE NGIGI

Posted  Monday, December 31  2012 at  20:12

In Summary

• The lack of cash for renting offices and hiring staff has delayed launch of the Authority, whose board members were appointed by Minister of Finance Njeru Githae in November.

The Treasury has allocated money for funding operations of the Unclaimed Assets Authority, clearing the path for launch of the institution that is supposed to handle unclaimed cash held by public corporations.

The lack of cash for renting offices and hiring staff has delayed launch of the Authority, whose board members were appointed by Minister of Finance Njeru Githae in November.

“We expect to launch as soon as the supplementary budget is approved. We had no funds for them as it was formed during the year and that’s why there was some delay,” said Mr Githae in an interview Monday.

Mr Githae said that the companies would continue to hold the unclaimed assets estimated at Sh200 billion for a while as the board appoints staff, gives notice for the submission of the assets, and opens holding accounts. The unclaimed assets board which is expected to appoint a management team to set guidelines for operations of the Authority.

Constitution of the board has also been put to question after the Media Owners Association wrote a letter to the minister asking him to cancel the appointment of one of the members on grounds of questionable “credibility and integrity,” which Mr Githae said would also be addressed.

“The new board is yet to meet since its appointment,” said Vincent Kimosop, a member of the Unclaimed Financial Assets Authority board. Companies were expected to submit dividends, cash deposits, labour wages, pension dues, and insurance claims held by them for a period of between three and five years at the start of November.

The board is expected to be constituted of seven persons who include the chief executive, permanent secretary to the Treasury and five persons selected by the ministers.

As per the Unclaimed Assets Act, which was passed last year November, the five appointees shall constitute an expert in banking and investment, insurance, unclaimed assets, accounts or law and a representative of consumers’ interests. Based on this guideline, the minister appointed Eric Orina whose appointment has been challenged, Abdijhani Abdirahman Haji Abass, Charles Mwangi Nduati, Asha Ndisyon Ngoley and Vincent Kimutai Kimosop to the board.

The chief executive will be recruited through a competitive process by the board. The mandate of the board will also include making payments out of the fund to the rightful owners, and managing and investing the funds of the Authority.

Notices by companies of their intention to submit unclaimed funds have not awakened investors and depositors into making claims, however, actual submission of the conservatively estimated Sh200 billion is expected to cause much public interest.