New entrant investors seeking to access the South African fishing industry via the next round of fishing rights allocations scheduled for 2021 (or possibly even 2022), should not wait until the finalisation of the scoring evaluation criteria before structuring their businesses to comply with these criteria.
Having advised on fishing rights allocations before, the contrived "restructuring" of businesses once the scoring and weighting criteria are published or shortly after the final invitations to apply for rights are gazetted, are clear indications of application fronts. This applies particularly to the ownership and management profiles of companies.
It is well known that companies are being fraudulently set up with black female domestic workers and gardeners to front for their masters. This is the consequence of black economic empowerment laws. These laws have unquestionably harmed more than they could conceivably have helped.
New entrants (And even existing right holders) need to ensure that their businesses align substantively with the six key scoring criteria that we know will be used to score applicants.
Our advice is that given the delay in the FRAP, new entrant applicants and existing right holders should use the next 6-8 months to substantively restructure their businesses so that they broadly comply with these six scoring criteria well before the commencement of any future FRAP.
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