10 November 2012

Kenya: Unclaimed Assets Take-Over Plan Queried

Nairobi — A constitutional decision to surrender to government all unclaimed assets from various companies hit a snag last week following threats of litigation from various interested parties.

Most potential litigants questioned the rush by the government to take over the unclaimed assets before the formation of the constitutional body, the Unclaimed Assets Commission as required by law.

The complainants read a sinister motive in the process where the government could mismanage and even embezzle the assets without a bona fide body in charge.

The fears have prompted the government to shelve the plan until the commission is formed.

Assistant Finance Minister Oburu Odinga said it would take some time before the body is in place as the credibility of the composition of the commission must be above reproach.

"The concerns expressed are genuine and therefore the public will have to wait a little longer for the commission to be assembled. This is one commission that needs the confidence of everyone if it is to succeed," said Oburu.

According to the Minister, the board will consist of a Chief Executive, Permanent Secretary to the Treasury and five persons appointed by the government.

Most asset and property holding companies in Kenya among them banks, insurance companies and asset managers have expressed concern over the their continued handling of unclaimed assets.

Recently, President Kibaki signed into law the Unclaimed Assets Bill which heralded the beginning of a process where the asset will be reverted to the government.

The law defines unclaimed assets as intangible or tangible property whose owners have not laid claim for a substantial amount of time despite reminders by the holding company.

It is generally felt that most of the holding companies to these unclaimed assets having been trading with them earning illegal returns that have not been debited to the assets. This is one of the reasons why the government deemed it fit to include a clause on unclaimed assets in the general Finance Bill.

As opposed to trading in these assets by the holding companies, the government has the right to utilize the unclaimed assets and they are seen as an easy fundraising avenue for the government which is currently running a budget bearing a heavy funding deficit.

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