Tens of Kenyan investors have been listed in a notice by Ugandan electricity company Umeme as having failed to collect their dividends running into millions of shillings from the company.
Umeme, which is cross-listed on the Nairobi and Uganda securities exchanges, has cumulatively paid out a total of Ksh14.62 billion (Ush359.8 billion – $95.4 million) in dividends since 2018, making it one of the top dividend-paying firms in regional exchanges.
The company listed 585 shareholders who have pending dividend collections but did not disclose the share of these uncollected payouts.
Read: Uganda’s Umeme declares $10.38m interim dividend
“The shareholders or their nominated beneficiaries, are requested to contact our Share Registrar, Custody & Registrar Services (Uganda) Limited…to update their payment records,” said the company in its notice.
Kenyan individual and institutional investors have increasingly eyed opportunities in the Uganda market, looking for returns from firms such as Umeme and listed telcos, which have a stable dividend policy.
Umeme has been cross-listed on the Nairobi Securities Exchange (NSE) since December 2012, becoming the first to break the trend where only Kenyan firms were cross-listing in other East African markets. It has since then been joined by Rwandan lender Bank of Kigali, which joined the NSE in November 2018.
Uganda, unlike Kenya, does not have a centralised agency where unclaimed financial assets such as dividends can be deposited for reunification with their rightful owners and beneficiaries.
The country’s laws allow for banks to deposit unclaimed balances with the Bank of Uganda, but there is no such provision for dividends, although its government is mulling the creation of an unclaimed assets authority.
This leaves to respective companies to trace and raise owners of dividends, who then have to lodge claims with the share registrars of such firms.
Read: Cross-listed firms hard-hit by drop in trade volumes
In Kenya, the Unclaimed Financial Assets Authority has received remittances worth Ksh53.4 billion from institutions to date, paying 27,107 claimants Ksh1.93 billion. The majority of the funds are held in stocks, while other sizable amounts are in the hands of insurers, banks, pension schemes, law firms, mobile phone money wallets and Saccos, among others.
Dividends and shares are among the more common unclaimed assets due to owners failing to disclose their next of kin or beneficiary details when purchasing the units.
Issuance of wrong mailing addresses has also contributed to the buildup of unclaimed dividends.
A baseline survey commissioned in 2018 estimated that Ksh241 billion in unclaimed financial assets was still unreported to Ufaa by public agencies and private firms.
The report further showed that approximately 477,112 public and private entities hold these assets in their books.
Source: The East African