As a child, my friends and I underwent different phases of the ‘finders keepers’ phenomenon. For a while, we believed that if you found something and nobody claimed it, it was yours. Then one day, a new kid in the neighbourhood told us that lost property was guarded by the powers of witchcraft and that if we kept it, the owner’s ghost would haunt us.

Our lawmakers must not have been sent that memo, because the Unclaimed Financial Assets Act gives custody of unclaimed assets in the country to the Unclaimed Financial Assets Authority. Here, I hope to consider what the implications of the Act are for business entities.

For an asset to be deemed an unclaimed asset as per the meaning given by the Act, certain requirements must be fulfilled. There must be a condition raising a presumption of abandonment and in addition, there must be certain other requirements. The latter refers to either one of the following:

• That the records held by the holder of the assets do not reflect the identity of the owner
• That the holder has not previously delivered the assets to the actual or apparent owner
• That the last known address of the apparent owner is in a country with no laws for escheat or custodial takings of unclaimed assets or if the laws are present, they do not apply to the assets held

Only some of the provisions in the Act affect the obligations of private business entities. These include provisions dealing with cheques, gift certificates or credit memos, unpaid wages, assets from dissolved entities, assets held in a fiduciary capacity and assets held in safe deposit boxes or repositories. Public companies are in addition affected by the provisions regarding stocks, shares and other intangible ownership interests.

Sums payable on cheques, drafts or similar instruments on which banks or financial instruments are directly liable have to be outstanding for two years for them to be presumed abandoned. The duration is calculated from the date the instrument was payable or if it is payable on demand, or from the date of its issuance. The presumption does not however arise where the owner has communicated in writing regarding the instrument or if he has otherwise indicated an interest as evidenced by a record prepared by the bank or financial institution. The provisions on cheques, drafts and similar instruments seem to relate only to banks and other financial institutions and not to other entities that deal with such instruments.

Assets that should be distributed during the dissolution of an entity are presumed abandoned if they remain unclaimed by the owner for more than 2 years. For assets held in a fiduciary capacity, the presumption of abandonment arises where there have been no transactions by the owner for more than two years or the owner has not in any way expressed interest in the assets for more than two years. Unpaid wages are deemed to have been abandoned if they are not claimed for more than one year. The period that must have passed for a gift certificate or credit memo to be presumed abandoned is five years. Assets held in a safe deposit repositories need to remain unclaimed for more than two years before they can be considered abandoned.

For companies that issue shares, the apparent owners of shares must have failed to claim them for a period of three years before these properly fall under the custody of the Unclaimed Financial Assets Authority.

Once assets fulfil the requirements for them to be considered unclaimed under the Act, certain obligation are imposed upon the holders of such assets. The main obligations are:

1. To locate and notify the owners of the assets where this is possible
2. To make a report of unclaimed assets to the Authority
3. To deliver abandoned assets to the Authority.

Once assets have fallen under the custody of the Authority, any person who wishes to make a claim must direct it to the Authority and not to the initial holder of the assets. The centralised management and control will therefore put a leash on "stuff" nobody seems to want.