The Standard Group Plc is a multi-media organization with investments in media platforms spanning newspaper print operations, television, radio broadcasting, digital and online services. The Standard Group is recognized as a leading multi-media house in Kenya with a key influence in matters of national and international interest.

Standard Group Plc HQ Office,
The Standard Group Center,Mombasa Road.
P.O Box 30080-00100,Nairobi, Kenya.
Telephone number: 0203222111, 0719012111
Email: [email protected]

NEWS & CURRENT AFFAIRS

The Nairobian

Agency in a spot over alleged misuse of Sh10 billion unclaimed assets

National

By Edwin Nyarangi | May 30, 2024

Unclaimed Financial Assets Authority (UFAA) CEO John Mwangi (left) and UFAA Chairman Francis Kigo before the Senate Finance and Budget committee to deliberate on a statement sought by Senator Orwoba regarding financial impropriety at the County Hall, Nairobi. [Elvis Ogina, Standard]

The Unclaimed Financial Assets Authority (UFAA) has been put to task over claims of misappropriating more than Sh10 billion of Kenyans’ unclaimed assets.

The Authority Chief Executive Officer John Mwangi and the Board Chairman Francis Kigo were on Tuesday hard-pressed to explain alleged embezzlement of the unclaimed assets.

The Senate Finance and Budget Committee Chaired by Mandera Senator Ali Roba asked Mwangi and Kigo to shed light on claims by Nominated Senator Gloria Orwoba that the agency cannot account for the Sh10 billion unclaimed assets.

Orwoba told the committee that a report by auditors contracted by UFAA showed that more than Sh10 billion was unaccounted for and according to the Auditor-General reports the state agency has been struggling to reconcile the increasing unclaimed assets to its legitimate owners.

Keep Reading business

In statement made on the floor of the House the Nominated Senator claimed that billions of shillings worth of unclaimed assets surrendered to UFAA by various institutions have been misappropriated. The assets were left behind by deceased persons with financial and other institutions including idle cash, shares and dividends.

“There is an alleged collusion between Unclaimed Financial Assets Authority and banking officials with a case in point being that of New Fortis Sacco which allegedly had unclaimed assets worth Sh80 million but was suspiciously reduced to Sh848,000,” she claimed.

Orwoba alleged that more than Sh1 billion unclaimed assets have suddenly found their owners who have claimed them yet the agency has no data corresponding to the same and there are discrepancies between what is declared by the institutions and what ends up at UFAA.

She claimed that another entity, which she withheld the name as there is a matter before court, had unclaimed assets worth Sh200 million but they were reduced to below Sh1 million with no supporting documents to show how the process was done.

The Nominated Senator said that this follows years of concerns over the reunification of the assets with their rightful beneficiaries and accused the agency of being in the process of securing a new system to allegedly erase records of all pertinent questions raised.

“Why is the ICT and Finance managers’ contracts of employment not renewed despite recommendation for the same by the Board, this raises suspicions of a move to manipulate records, if the systems are automated, why then do your officers still use Excel documents?” Posed Orwoba.

The Nominated Senator said the two officers play a critical role in terms of safeguarding the unclaimed assets and wondered why the CEO and the Board chair pushed for the firing of the duo immediately she petitioned the Senate to launch investigations into the allegations.

Orwoba in her statement wanted the Senate Finance committee to establish the total amount of funds that have been remitted to the UFAA over the last five years as well as investigate discrepancies regarding unclaimed funds amounting to Sh10 billion.

The Nominated Senator wanted the committee to establish why UFAA incurred expenses of over Sh500 million for substandard audit services undertaken and the role played by the UFAA management in supervising the audits.

In March, the Authority said it was holding Sh63 billion worth of unclaimed assets and have unified Sh2 billion and are on course to look for the owners of the assets.

Mwangi and Kigo upset the committee with their underwhelming responses and Roba told them that with lack of documents and clear unpreparedness they might assume that by speaking nicely they will be able to evade the essence of the questions which will not be allowed.

“Honestly if you have come here without the required documents, what do you expect this committee to do with you? It means that what Senator Orwoba is saying is true which serves to confirm what she has told us in her statement,” he said.

Kakamega Senator Boni Khalwale raised concern over how the agency created an opportunity for unscrupulous people to take advantage of the fund saying that as one of the legislators who supported establishment of the Authority he did not know they were creating a monster.

However, the officials requested 14 days to draft and present a comprehensive report on how the money was spent and respond to other questions raised by the senators.