Royal AM Ordered to Pay Back R27 Million: High Court Draws Line on Municipal Sponsorship

BillyLouisjay 1:54 AM


Pietermaritzburg High Court invalidates Msunduzi Municipality's R27 million sponsorship deal with Royal AM— declaring it unlawful and demanding full repayment, igniting urgent calls to redirect funds toward service delivery.

On August 8, 2025, the Pietermaritzburg High Court delivered a landmark ruling: the R27 million sponsorship agreement between the Msunduzi Municipality and Royal AM Football Club—owned by businesswoman Shauwn Mkhize—was declared unlawful and invalid. Judge Nontuthuzelo Mlaba ordered that all funds paid under this deal must be repaid with interest.(The Witness, Briefly)

The judgment delivered a long-awaited verdict on a sponsorship arrangement that had sparked controversy from its early days in mid-2023.

The Sponsorship That Sparked Backlash

  • In July 2023, Msunduzi Municipality inked a three-year R27 million sponsorship deal with Royal AM, promising annual payments of R9 million. The deal aimed to promote sports development and drive tourism by hosting matches at Harry Gwala Stadium.(The Witness, The Star)

  • The DA (Democratic Alliance), backed by civic groups such as MARRC, immediately challenged the deal, citing the municipality’s dire financial state and failure to comply with constitutional and legislative procurement requirements.(The Witness, Polity.org.za)

Legal Battle Unfolds

  • Legal proceedings began in late 2023. By February 2025, judgment was reserved in the Pietermaritzburg High Court—signaling a protracted legal showdown.(kzn.da.org.za, African News Agency)

  • Public pressure intensified as Royal AM faced tax-related troubles, PSL expulsion, and mounting scrutiny over its management.(Ladies House News, FakazaNews)

Sponsorship Terminated Before Ruling

In July 2025, following Royal AM’s PSL relegation and deteriorating club finances, Msunduzi Municipality officially cancelled the sponsorship deal. Officials cited a contractual clause allowing termination if Royal AM ceased playing in the PSL.(The Witness)

This decision was welcomed by the DA as a victory—but legal accountability remained pending.(kzn.da.org.za, The Witness)

The Court’s Verdict

In Judge Mlaba’s ruling, the sponsorship was struck down mainly for violating Section 217 of the Constitution, which mandates fair, equitable, transparent and competitive procurement processes. The deal’s exclusive nature—benefiting only Royal AM—fell short of this requirement.(The Witness, Briefly)

The court deemed the payments legally invalid and ordered immediate recovery of all monies paid, with interest accruing from the payment dates onward.(The Witness, ECR)

Community groups and ratepayer associations hailed the ruling as a win for transparency, accountability, and proper governance.(The South African, ECR)


  • DA’s Challenge    : The DA had argued that while the municipality was struggling to deliver basic services, it opted to spend large sums on a controversial sports deal—seemingly favoring a wealthy football club over civic needs.(Polity.org.za, The Witness)

  • From PSL to Court: Royal AM's troubles extended beyond sponsorship. FIFA sanctions, SARS curatorship, and mismanagement led to the club’s downfall, which in turn undermined the claims of economic benefit used to justify the deal.(Ladies House News, FakazaNews)

  • Contract Machinery: The ruling underscores the importance of competitive procurement, legal compliance, and protecting taxpayers—especially when public money enters the realm of private gain.


As a South African editor attuned to both governance and emotion, I invite public reflection:

  • Should sporting development ever justify large municipal investment when basic services remain underfunded?

  • How can transparency be ensured when deals involve politically connected individuals or private interests?

  • What steps should follow—recovery of funds, surcharging officials, or reform of procurement safeguards?

Your voice matters—let’s shape a public discourse that protects the integrity of local government and delivers real benefits for all residents.

Sources

  • The Witness – High Court ruling invalidating sponsorship(The Witness)

  • The South African – Ruling requiring repayment by Royal AM(The South African)

  • ECR News – Summation of court outcome and public reaction(ECR)

  • The Witness – Municipality’s cancellation of deal after PSL exit(The Witness)

  • The Witness – Termination tied to club’s PSL relegation(The Witness)

  • African News Agency / IOL – Judgment reserved in DA’s challenge(African News Agency)

  • Polity / The Star – DA’s early legal challenge details(Polity.org.za)

BillyLouisjay

Posted by BillyLouisjay

Post a Comment

0 Comments

Post a Comment