Court bid over Msunduzi, Royal AM deal

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Published Oct 11, 2023


Durban - The DA has gone to court to challenge the decision by Msunduzi Municipality to conclude a sponsorship deal with Premier Soccer League club Royal AM.

In its papers filed in the Pietermaritzburg High Court, the party wants the decisions taken by the municipality in July this year in connection with the deal to be declared unlawful, reviewed and set aside.

It includes the approval of the three-year sponsorship deal, which comes with a R9 million payment per annum to the club, and that the municipality will be held liable for the maintenance of the Harry Gwala stadium and the decision taken by the municipal manager to enter into the contract.

It also wants any payments already made to the club to be repaid to the municipality.

Royal AM is also cited as a respondent.

In his affidavit in support of the court action, DA Msunduzi caucus leader, councillor Ross Strachan, said the application was being brought to deal with “patently unlawful decisions” made by the council, city manager and the municipality regarding the sponsorship deal.

He states that Royal AM was founded by Shauwn Mkhize, who is “reportedly worth hundreds of millions of rand”, and her son Andile Mpisane.

Strachan said the municipality was in a perilous financial position, with the National Treasury stating that the municipality’s budget was unfunded, not credible and not sustainable.

He said the municipality had been under administration for the past four years and was in a “downward spiral of decay”.

Strachan said the municipality had failed to provide residents with basic services.

“Its failure to maintain existing infrastructure and invest in new infrastructure had led to further deterioration of basic municipal services. Frequent water and electricity outages, poor road conditions and inadequate waste management services characterise the lives of residents in the municipality.”

Strachan argued that the municipality was failing to comply with its fundamental constitutional duties.

He said it had not complied with supply chain management processes by violating sections of the Municipal Financial Management Act when it entered into the sponsorship deal, and that the decision was unreasonable.

“It is unreasonable for the municipality to advance tens of millions of rand to sponsor a Premier League Soccer Club in circumstances in which it is failing to comply with its constitutional and statutory duties to provide basic services to residents, and where its financial position is so weak.”

In response to the application, Msunduzi Municipal Manager Lulamile Mapholoba acknowledged the legal action mounted against them.

“We received papers last week, and we are briefing our lawyers this afternoon.’’

However, he denied receiving any letter from the DA prior to the court papers.

“It is not true that DA served any letter. I am still awaiting that letter to this day.’’

In his media statement on the court action, Strachan had said the party wrote to the municipal manager seeking answers on the deal, stating that failing which, the DA would take the municipality to court.