Ufaa claims stake in listed firm ownership, eyes big dividends
What you need to know:
- Ufaa could also get new revenue from dividends that are now held by individual registrars some of whom have declined to reveal the truth about unclaimed shares in their custody.
- NSSF stands to suffer further from the Covid-19 impact that has hit the market hard.
The National Treasury’s Sh22.13 billion dividends from stakes held in listed firms could soon quadruple after the Unclaimed Financial Assets Authority (Ufaa) applied to repossess shares ‘without’ owners.
The 800 million shares scattered among registrars in individual accounts, are to be bulked into one account to be held in trust by the State agency giving it new impetus to take an active role in management of the various listed entities.
“By virtue of the holdings in Centum, StanChart and other companies, Ufaa could apply for a board seat giving it teeth to determine the direction of these companies,” says the authority.
Ufaa’s notice, which lapses on August 31 opens the lid on goings-on in some share registrar firms who have in the past disposed of stakes belonging to private individuals without their authority.
Ufaa could also get new revenue from dividends that are now held by individual registrars some of whom have declined to reveal the truth about unclaimed shares in their custody.
Ufaa chief executive John Mwangi said managing the portfolio of shares held by registrars was not only tedious but wasteful since the authority hardly raised any revenue from them.
“Members of the public are notified that various institutions have reported over 800 million units of unclaimed shares among other assets. The authority wishes to advise apparent owners or beneficiaries to lodge claims. Shares not claimed as at August 31 may be sold by the authority (Ufaa) as per the law,” he said.
The development could jolt the market with Ufaa becoming an active player thereby getting privy information on monies held by listed firms in suspense accounts contrary to laid down regulations that such funds be remitted to the authority by October 31 of every year.
Currently, the government holds major stakes in Kenya Airways (48.9 percent), East African Portland Cement (25.3 percent), Uchumi (14.67 percent), Mumias Sugar (20 percent) Housing Finance (2.41 percent), Liberty Kenya (0.86 percent), Kenya Electricity Generating Company (70 percent) and Kenya Power where it holds 50.086 percent shareholding.
Treasury’s stake grows larger due to the State-owned social security fund, NSSF which holds major stakes in 28 listed companies which were valued at Sh64.5 billion as at June 30, 2018 but that was eroded by 28.6 percent or Sh18.5 billion due to the bear run by March this year.
The state agency stands to suffer further from the Covid-19 impact that has hit the market hard.
“We need to put the shares into one pot-Ufaa, that listed companies will identify as a stakeholder in their companies. That strengthens our voice in the decision making process within the listed companies,” said Mwangi.
Ufaa being a licensed non-trading custodial depository agent will see all shares transferred to it giving it full rights to vote at AGMs, take up shares during splits as well as directly receive dividends.
The move also creates room for shares less than a hundred to be traded unlike in the current scenario where those below cannot be dealt in the open market.