Assistant Finance Minister Oburu Odinga said on Thursday that the process of forming the Unclaimed Financial Assets Authority may take longer because the ministry must ensure credibility of those who will take charge of its board.
The board is supposed to consist of a Chief Executive, Permanent Secretary to the Treasury and five persons selected by the minister.
Without giving an exact date, Odinga told Capital Business that the ministry will ensure the Authority is in place soon, and called on all the firms to be patient.
“The (Unclaimed Financial Assets) Bill has been signed into law and I can admit that we have been a bit slow in establishing the authority but we are going to do it very soon. That is a very important authority and we have to wait a little longer because all the monies and assets have to be surrendered through this authority,” said Odinga.
An unclaimed asset is intangible or tangible property that has been abandoned or lost by its rightful owner for an extended amount of time.
Several firms, mostly banks, have recently published notices asking shareholders to claim their dividends and refunds or have the money transferred to the authority once it is established.
However most of them have blamed the government for not creating enough awareness about the matter, after it emerged that many Kenyans declined to obey the call by these firms despite many having huge unclaimed assets.
Odinga however especially warned financial institutions not to run the unclaimed assets into their companies’ capital but instead wait until the authority is formed.
“It is a cheap way of raising money on our side rather than letting this money lie in the banks. Sometimes banks turn these assets into their capital which is not right. We have seen in other countries where these unclaimed assets have been used to develop infrastructure,” said the minister.
Dividends paid by listed companies, bank deposits and insurance claims form the bulk of these assets.
Kenya Bankers Association CEO Habil Olaka, on his part, said this will continue to create confusion in many firms since the government has not given any guidance on way forward until the authority is formed.
“Not only the banks but other players holding what can be termed as unclaimed financial asset are going to remain in a dilemma,” Olaka said.
Some of the listed firms which have recently published notices calling on shareholders to claim their dividends include Barclays Bank, National Bank of Kenya, CFC Stanbic, Kenya Commercial Bank among others.