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(CNS Business): A local watersports operator, who has been in business in Cayman for 25 years, is calling on government to stop the practice of “fronting” whereby a Caymanian owns a boat but allows an expat to become the de facto owner. Dexter Ebanks of Fantasea Tours said the practice is widespread in the watersports industry where boat owners with business licences lease the use of their craft, allowing others to effectively run the company under their licence, which hurts legitimate operators. “If you don’t own the boat, you should not be able to take somebody’s boat and operate that boat as if it’s yours,” Ebanks said.
At the same time, he wants the government to repeal the law allowing 60-40 ownership of businesses with Caymanians taking the majority share and expats the remainder.
“All that does is encourage fronting,” he said, offering several reasons why he wants to see a halt to this practice. For one thing, he simply considers fronting “wrong”, whether it’s through the 60-40 arrangement or other means.
Various people have approached him to skirt the rules, he said. “I’ve had people ask me, ‘I have a boat. Can I operate under your licence?’ And my answer is, ‘No, if you are going to operate under my business licence, I want to own that boat and I will try to get you a work permit.’ It’s bothering me that any Tom, Dick or Harry can come here (and make that arrangement).”
In addition, he said the practice hurts smaller watersports operators.
“For far too long, this has happened and everybody in the world can come in here. It’s cutting in on the little guys that want to make a living. There’s a lot of resentment about this.”
As for the 60-40 split, Ebanks was adamant that arrangement should be disallowed. “Who the hell would think that isn’t fronting? If somebody comes here and says, ‘Oh, I want to start a business for $10 million,’ how many Caymanians can come up with $6 million?
“I don’t have a problem with people coming in here to invest as long as you’re not stepping on my corns.”
While the boat captain would not speculate on exactly how many owners lease out their craft, he nevertheless considers the practice common enough that he believes it requires government intervention. “If you want to do away with this perception that people are fronting, pass a law where you have to own your boat. If you are going to operate in the Cayman Islands, you should own that craft.”
He also warned that the apparent ease of leasing the boats to anyone who wants to operate a watersport business raises safety concerns. “If you’re going to operate any boat, you should be legally operating it to the highest standard of safety.”
Raising alarm bells, Ebanks said he has witnessed someone captaining a boat, which he knew belonged to a different person, who got into difficulty stopping to see the stingrays at the sandbar. He had to step in to instruct the other “captain” how to deal with the situation.
“I always brief my people before I leave the dock,” Ebanks said. “Before I get to the sandbar or the reef, I brief them again before they get into the water. I do this not only for safety issues but also for protection of the reef and protection of the stingrays.
“I’m the captain and together with the gentleman working for me, the two of us have about 60 years of experience in the watersports business. And I don’t allow anybody to operate my boat without me being on it. The boat is captained by me with my mate. There are so many people that own a boat that don’t have a clue how to operate that boat.”
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