The DA is calling for the termination of Royal AM’s R27 million sponsorship by the Msunduzi Municipality due to the club’s financial troubles and legal issues.
The Democratic Alliance (DA) is calling for the immediate termination of Royal AM’s controversial R27 million sponsorship by the Msunduzi Local Municipality in KwaZulu-Natal.
This comes as the football club, owned by the high-profile Durban businesswoman Shauwn Mkhize, faces mounting financial and legal troubles.
The motion, submitted by the DA in the Msunduzi council, urges the municipality to review and terminate its financial backing of the Betway Premiership club, which has been embroiled in a series of scandals.
The DA argues that the municipality should not continue supporting a business that is under legal scrutiny, including serious allegations of tax evasion.
Royal AM has been in the headlines recently for its failure to pay player salaries in December, a sign of its ongoing financial struggles.
The club’s troubles extend beyond payroll issues, as businesses linked to Mkhize have been under investigation since November, when the South African Revenue Service (SARS) conducted a search and seizure operation over a tax debt exceeding R40 million.
The DA’s call for an end to the sponsorship is based on the club’s deepening financial woes and the legal battles it is facing, which include allegations of tax evasion.
Reggie Khanyile, a DA councillor in Msunduzi, expressed concern that the municipality’s continued support of Royal AM could damage its reputation.
He pointed out that the club is under curatorship, undergoing sequestration processes, and struggling to meet its financial obligations.
“The municipality cannot continue supporting a business facing serious legal proceedings, including allegations of tax evasion,” Khanyile said.
“Non-compliance with tax laws and deliberate tax evasion are criminal offences that should not be taken lightly by any municipal authority.”
Khanyile also highlighted that Royal AM’s financial instability is not only affecting the club but also its employees.
The club has reportedly breached contracts with former players, is facing sanctions from FIFA, and risks being declared insolvent by the world football governing body.
“Maintaining a relationship with an entity under such scrutiny is damaging to the municipality’s reputation,” Khanyile added.
Earlier this month, Royal AM requested that the Premier Soccer League (PSL) postpone their match against Chippa United after players allegedly went on strike due to unpaid wages.
This incident further underscores the club’s dire financial situation and raises questions about the sustainability of its operations.
The DA has long opposed the sponsorship deal between Royal AM and the municipality, citing concerns about the lack of service delivery in Msunduzi.
The municipality has been grappling with collapsing infrastructure, leaving residents without consistent access to essential services like water and electricity.
The DA argues that the R27 million allocated to the club could be better spent addressing these pressing issues and supporting the youth of Msunduzi through the maintenance of sports facilities and funding youth programs.
“There are critical issues in the municipality that need urgent attention. Y
oung people are left vulnerable to crime and drug abuse due to a lack of support, yet Msunduzi is funding an entity that contributes nothing to the city apart from controversy and embarrassment,” the DA stated.
The DA’s call for the termination of the sponsorship comes at a time when the municipality is already under pressure to address the deteriorating state of public services.
The party believes that the funds currently allocated to Royal AM could be redirected to initiatives that would have a far greater positive impact on the community, particularly the youth.
The sponsorship, which was initially intended to promote the city and support local sports, has become a source of public debate. Critics argue that the financial backing of a club mired in legal and financial troubles is not in the best interest of the municipality or its residents.
With the club’s future uncertain and its reputation tarnished, the DA’s call for an immediate review of the sponsorship deal is gaining traction.
As the legal and financial challenges facing Royal AM continue to unfold, the DA is calling on the Msunduzi Local Municipality to take swift action and reconsider its support for the club.
The outcome of this motion could have significant implications for both the future of Royal AM and the reputation of the municipality.
The ongoing scrutiny of Mkhize’s business dealings and the club’s financial instability have raised serious questions about the wisdom of continuing to invest public funds in a venture that is increasingly seen as a liability rather than an asset to the community.
