MSUNDUZI Municipality is yet to decide on the future of its R27 million sponsorship to the Premier Soccer League’s (PSL) Royal AM FC, which is currently facing financial crises due to its multi-millionaire owner Shauwn Mkhize’s trouble with the taxman.
The team’s three-year sponsorship deal with the municipality, which is struggling to fulfil its service delivery mandate, would come to an end in the 2025/2026 financial year. Since 2023, it has been receiving R9 million per year.
The team has been put under curatorships, a situation linked to the cancellation of its Betway Premiership and Nedbank Cup games.
Following a raid at Mkhize’s properties, confiscation of her movable properties, and freezing of her bank accounts in November, its players were subjected to a gloomy festive season with no salaries for December.
The financial situation was so bad that even the PSL was reconsidering the team’s future in the league for failing to pitch up for matches. Its Thursday home game against Orlando Pirates FC at Pietermaitzburg’s Harry Gwala Stadium was postponed.
Several political parties in the council and the Msunduzi Association of Residents, Ratepayers and Civics (MARRC) had in the past made unsuccessful attempts to force the municipality to abandon the sponsorship deal, saying the money could be better used to boost their crumbling service delivery.
Several attempts to get comment from Royal AM general manager Richard Makhoba proved futile.
When asked if the municipality was reconsidering whether or not to continue with the sponsor, municipality spokesperson Ntobeko Ngcobo said that would be the decision of their council, following the DA’s motion for the deal to end.
“Not yet (cancelled) since the sponsorship was the council resolution,” said Ngcobo.
She said once Speaker Eunice Majola confirmed receiving the motion, it would be engaged in line with the rules of order.
“It should be put on the council meeting’s agenda, then we will talk once the council’s outcome is known,” she said.
She said she would consult with the municipality’s legal department to establish whether or not the municipality was legally correct to continue sponsoring the team whose owner, Mkhize, was suspected of being in breach of the tax laws.
“I am sure this is something that they have looked at,” she said.
However, the South African Revenue Service (SARS) started scrutinising Mkhize before her team signed the deal with the municipality.
In 2023, the Durban High Court issued a warrant of execution against Mkhize, ordering the sheriff or deputy sheriff to “attach and remove the movable property of Mabong Flora-Junior Mkhize, (Mkhize’s name), for owing SARS about R50m in outstanding tax payments.”
At the time, Mkhize was estimated to have a net worth of R300m.
Ngcobo said when the SARS issue resurfaced recently, Mkhize promised to resolve it.
PSL Executive Committee was due to meet with the team management on Friday “to afford Royal AM (under curatorship) to make representations regarding this matter”.
The league said Royal AM’s failure to attend games started on January 11 when it was supposed to play against Chippa United FC “due to difficulties arising from the appointment of a curator”.
“The Executive Committee (ExCo) has since convened three separate meetings seeking the assurance that the club will be able to meet its fixture commitments in a compliant fashion.
“On 17 January 2025, ExCo was informed that a joint letter of comfort (from club management and the curator) would be provided, confirming that the issues that led to the club being unable to meet its commitments had been resolved.
“No such letter of comfort has been forthcoming and ExCo has been left with no alternative but to cancel PSL Fixtures - Royal AM vs Orlando Pirates Harry Gwala Stadium at 19h30 - and to suspend all other Royal AM fixtures (Betway Premiership and Nedbank Cup) until further notice,” read the statement.
Msunduzi Mayor Mzimkhulu Thebolla previously said the municipality decided to bring Royal AM to the city as it was looking for a PSL team to partner with in promoting Pietermaritzburg.
The city adopted Royal AM after ditching local Maritzburg United FC, which had been relegated to the Motsepe Foundation Championship.
Upon Maritzburg United’s relegation, Royal AM abandoned a R15m sponsor from eThekwini Municipality before the deal came to an end and swiftly moved to Pietermaritzburg.
During the raid, SARS officials, who were accompanied by heavily armed police officers, also paid a visit to Royal AM’s clubhouse in Maqongqo, a rural village outside Pietermaritzburg.
While law enforcement officers left Mkhize’s houses in Gauteng and KwaZulu-Natal with luxury vehicles, including a Lamborghini, a Rolls Royce, Mercedes-Benz Maybach, BMW X4 and X6, Mercedes Benz-AMG G 63, Toyota Hilux Legend 50, Mercedes-Benz Z-Class, and trucks full of valuables, it remained unclear what was confiscated at the clubhouse.
A source, who close to the Mkhize family, said Mkhize currently has no access to her bank accounts.
“SARS told the banks to freeze all her accounts. Shauwn’s sister and her (sister)’s husband do not have access to bank accounts as they also have their assets attached,” the source said.
DAILY NEWS