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Kenya Power unclaimed client refunds, dividends hit Sh1.7bn

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Kenya Power acting CEO Jared Othieno. FILE PHOTO | NMG 

Kenya Power faces a Sh1.8 billion penalty for failing to submit uncollected dividends and other financial assets amounting to Sh1.7 billion in the year ended June, Auditor-General Edward Ouko has warned.

Unclaimed dividends, customer refunds, un-identified receipts, wayleaves compensation and stale cheques have been piling up at the electricity distributor which has failed to report and hand them over to the Unclaimed Financial Assets Authority (Ufaa).

These financial claims had risen from Sh1.6 billion a year earlier. Unclaimed dividends alone stand at more than Sh300 million.

Failure to report and submit the amounts means the agency cannot make efforts to reunite the financial assets with their rightful owners.

According to the Unclaimed Financial Assets Act, 2011, failure to comply attracts a penalty of 25 per cent of the assets in addition to a daily interest of Sh7,000 for each day a report is late in submission.

“This aspect of non-compliance may cost the company up to Sh1.8 billion, in interest and penalties as at June 30, 2018,” Mr Ouko said in his audit report on Kenya Power’s financial statements.

Failure to report and remit the unclaimed financial assets to Ufaa means their owners cannot access them since only the agency can hand them over once they have been unclaimed.

According to the law, financial assets are deemed to have been abandoned if they have not been claimed for a specific period of time.

Shares and the dividends accruing thereon are considered abandoned if they are unclaimed for more than three years.

The agency has accumulated Sh10.5 billion in cash over the past three years that has not been claimed. That figure includes assets worth Sh8.53 billion that have been snubbed by mainly rich families.

The accruing penalty is one of several significant exposures which have not been disclosed by Kenya Power before, making it difficult for investors to determine the company’s actual financial position.

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