On August 8, 2025, the Pietermaritzburg High Court ruled that the controversial three-year sponsorship agreement between Msunduzi Municipality and Shauwn “MaMkhize” Mkhize’s football club, Royal AM, was unlawful and invalid. The court found that the municipality failed to follow transparent, fair, and competitive procurement processes as required by Section 217 of the Constitution. Royal AM was chosen without justifiable reason, excluding other KwaZulu-Natal soccer clubs from competing for the sponsorship. The judge ordered that all funds paid under the agreement—including R27 million plus interest—must be repaid to the municipality immediately.
This ruling came after a legal challenge brought by the Democratic Alliance (DA), which argued that the municipality was in severe financial distress when it approved the sponsorship in July 2023. The DA contended that the deal violated legal and administrative requirements, especially given Msunduzi’s urgent need to address service delivery rather than fund private interests. Initially, the municipality had sponsored Maritzburg United, but after the club’s relegation from the Premier Soccer League (PSL), the sponsorship switched to Royal AM. However, Royal AM subsequently faced financial troubles—including a SARS investigation and curatorship—and was relegated from the PSL. As a result, Msunduzi Municipality terminated the agreement in June 2025. The DA welcomed the court’s decision, urging the municipality to use the recovered funds to improve critical services for residents.
Timeline of the Msunduzi Municipality and Royal AM Sponsorship Saga
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July 2023: Msunduzi Municipality signs a three-year sponsorship deal with Royal AM, committing R9 million annually (totaling R27 million).
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Between 2023 and 2025: Payments are disbursed to Royal AM under the sponsorship agreement.
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February 2025: The Democratic Alliance files a legal challenge, citing the deal’s unlawfulness and lack of transparency during municipal financial distress.
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Early 2025: Royal AM encounters financial difficulties and SARS investigations, leading to its placement under curatorship.
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June 2025: Msunduzi Municipality cancels the sponsorship as Royal AM is relegated and ceases PSL participation.
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August 8, 2025: Pietermaritzburg High Court rules the sponsorship agreement unlawful and orders Royal AM to repay the full amount with interest.
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August 12, 2025: Public and political responses praise the ruling as a major step toward municipal accountability and governance reform.
This landmark ruling highlights critical issues surrounding governance and financial management in municipalities, especially regarding public funds during financially strained periods. It underscores the constitutional obligation for municipalities to conduct procurement processes that are lawful, transparent, and fair, while promoting responsible spending for the benefit of communities.
