Royal AM have been taken to court by the Democratic Alliance in KwaZulu-Natal over what they call an “illegal R27 million sponsorship” and a “waste of tax-payer money” with Msunduzi Municipality.
The DA added that Royal AM is a multi-billion business, terming the Msunduzi Municipality “bankrupt” for failing to do its duty in Pietermaritzburg.
Royal AM have secured themselves a mouth-watering R27 million sponsorship deal with the Municipality and also the rights to play at Harry Gwala Stadium for three years.
Shauwn Mkhize’s club replaced Maritzburg United following the latter’s relegation to the Motsepe Foundation Championship, with the deal set to expire at the end of the 2025/26 season.
The municipality, when it struck the deal, said it cannot have the venue not play top-flight football because that will be a loss of revenue in the tourism sector.
However, the DA in KwaZulu-Natal have now confirmed that both entities have been “served with court papers following their refusal to accede to our demands over the illegal R27 million sponsorship of the club by the bankrupt ANC-EFF-PA run municipality”.
“On 19 July 2023, the DA wrote to the municipal manager putting him on notice that unless answers were provided on the sponsorship, the processes followed and requests for further information, the DA would take the municipality to court to protect its financial stability in the face of ANC-EFF-PA corruption and maladministration,” DA Msundizi caucus leader Ross Strachan said in a long statement.
“Suffice to say, both Msunduzi and Royal AM failed to respond. In our founding affidavit to the Pietermaritzburg High Court, we make state the following:
• The municipality has failed in terms of its duties as required by Section 152 of the Constitution to provide services to communities in a sustainable manner;
• It breached Section 217 of the Constitution to contract in system which is fair, equitable, transparent, competitive and cost-effective;
• It ignored the Preferential Procurement Policy Framework Act 5 of 2000;
• It violated Section 15(a) and (b) of the Municipal Finance Management Act (MFMA) which allows municipalities to incur expenditure in terms of an approved budget and;
• Section 33 of the MFMA was not followed in that it imposes financial obligations on Msunduzi beyond the three years covered in the annual budget for 2024/2025;
• Section 112 of the MFMA was not followed in that the municipality’s supply chain process which required the Royal AM sponsorship to go through a competitive bid;
• Regulation 10 of the Municipal Cost Containment Regulations and the municipality’s own cost containment process state that sports events must not be financed by the council.
“The DA is also seeking to obtain a personal costs order against the municipal manager, who willfully placed Msunduzi in an even more perilous financial position.
“It is the DA’s view that the council decision of 19 July, relating to the approval of the Royal AM sponsorship should be reviewed, set aside, and declared unlawful and unconstitutional. Serious questions remain about why Royal AM, a “billionaire’s fantasy football team”, was chosen to be sponsored when it was clear their home ground was not Pietermaritzburg.
“It is also interesting to note that the ANC Provincial Government has had absolutely nothing to say about this R27 million waste of taxpayer money yet has the time to relentlessly peruse one of the best performing municipalities in the province, the DA-run uMngeni Local Municipality.
“The DA will not sit idly by while the ANC-EFF-PA coalition of corruption seeks to steal every last cent from the Msunduzi Municipality, and we commit to fighting this case on behalf of the residents until accountability and good governance is achieved.”
Strachan added to this publication that “a court date has not been set yet”.