Twenty firms, including CIC Insurance and Equity Bank, have been fined Sh2.2 billion for failing to transfer unclaimed assets such as dividends, insurance claims and savings to a State agency that reconnects idle properties with their owners.
Fifteen of the 20 companies have been fined at least half of the value of assets they failed to transfer to the Unclaimed Financial Assets Authority (UFAA), according to disclosures by the Auditor-General.
CIC Insurance bore the heaviest brunt of the penalties with a fine of Sh999.6 million for failing to remit Sh1.4 billion to UFAA ahead of Equity Bank (Sh249.7 million) and Moi University (Sh211.3 million).
Unclaimed cash, shares and dividends surrendered to UFAA crossed the Sh75 billion mark in November last year, reflecting the difficulty in reuniting the idle wealth as investors, including tycoons, show disinterest in reclaiming the assets.
Idle assets include money in bank accounts and dividends which have been dormant for more than five years, bankers’ cheques not cashed and contents in safe deposit boxes unclaimed for more than two years.
Insurance policies that remain uncollected for two years and cash sitting in mobile phone wallets for the same period should be transferred to UFAA.
Reporting and surrender of unclaimed financial assets by all holders is mandatory and is due on or before November 1 every year. Holders are encouraged to file nil returns if applicable.
The law allows UFAA to charge any entity that fails to surrender unclaimed assets a penalty of 25 percent of the assets held.
In addition, 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 UFAA.
The Auditor-General’s report of UFAA books noted that the penalties have triggered spats with companies, delaying the transfer of the unclaimed assets and payment of fines.
“The audit established that failure to close compliance audits was due to imposition of heavy penalties on holders for the assets identified during compliance audits, thereby discouraging holders from remitting assets to the Authority,” said the Auditor-General.
The penalties on 20 audited firms amounted to Sh2.2 billion against identified unclaimed assets of Sh5.1 billion.
UFAA hired three compliance auditors to help it audit 134 companies in five phases and unremitted assets worth Sh12.2 billion were identified.
The compliance auditors charged UFAA Sh416.3 million, while the State agency charged the targeted firms Sh318.8 million for the job. But UFAA had only collected Sh94.5 million of the charges as at August last year, says the Auditor-General.
Listed gas making manufacturer Carbacid Investment received the most disproportionate penalty, with the authority fining it Sh30.8 million for failing to remit Sh1 million.
Moi University Retirements and Benefits Scheme was fined Sh111.6 million for failing to remit Sh29.7 million. This means the penalty was 375 percent of the unremitted assets.
The University of Nairobi had the largest volume of unclaimed financial assets not remitted to the UFAA at Sh2.3 billion, but was fined Sh66.8 million.
The Auditor-General’s report did not disclose the assets that had not been transferred to UFAA.
Learning institutions are expected to remit overpaid fees and caution money that remain unclaimed for a period exceeding two years after a student’s schooling. Cash-strapped public universities held unclaimed assets worth Sh2.6 billion.
Maseno University was holding Sh40.6 million of unclaimed assets, attracting a fine of Sh74.5 million.
Pioneer Assurance had penalties of Sh131 million imposed for unremitted Sh246.5 million, while Pacis Insurance paid fines of Sh10.1 million for keeping Sh6.2 million idle assets.
Many Kenyans said UFAA remain uninterested in pursuing funds legally belonging to them or their families.
Billionaire businessmen, former powerful government officials and prominent politicians are in the long list of individuals with shares worth Sh39.4 billion that have been surrendered to the Treasury, up from Sh30 billion in 2021 and Sh16.42 in 2017.
The authority reckons it had received Sh36.09 billion in cash in local and foreign currencies from Sh23.2 billion in 2021.
Surrendered safe boxes that are believed to contain jewelry, title deeds, share certificates and Treasury bills rose to 3,737 units from 1,953 in June. Over 9.87 million unit trusts whose values were not disclosed were also part of the idle assets.
The money is largely held by insurance companies, banks, pension schemes, legal firms, mobile phone money wallets and saccos, among others.
So far, the authority has reunited less than 10 percent of the billions worth of shares and cash with beneficiaries, representing 1.9 percent of the unclaimed assets.
Kenyans have failed to claim Sh3.2 billion lying idle in M-Pesa wallets, with Airtel and Telkom Kenya subscribers having Sh114.3 million and Sh7 million, respectively.
Some of the unclaimed assets are linked to the deceased having kept their wealth secret and the absence of Wills.
