A decision by the cash-strapped Msunduzi Municipality, whose infrastructure has been in a state of decay for decades due to lack of service delivery, to donate R27 million to super-rich tenderpreneur Shauwn Mkhize has encountered rage.This time legal action has been instituted against the allocation of R27 million to the Royal AM Football Club owned by Mkhize whose mother Florence was an ANC struggle veteran. The three-year contract, signed in July, would see the team receiving about R9 million per annum.
The deal also entailed that in addition to the funding, the city of Pietermaritzburg would be responsible for the maintenance of the Harry Gwala Stadium, the new training facility for the team that previously exercised at Durban’s Chatsworth Stadium.Neither Mkhize nor the municipality and Co-operative Governance and Traditional Affairs (Cogta) MEC Bongi Sithole-Moloi has responded to Sunday Independent’s questions.
The provincial government lauded Mkhize in 2021 for buying Bloemfontein Celtic for R50 million and rebranded it to Royal AM, which was an addition to the provincial-based Premier Soccer League teams.
DA leader at the municipality Councillor Ross Strachan has approached the Pietermaritzburg High Court to stop the sponsorship or even reversing any money that might have already been given to the team.“The city has no money, we have less than 10 days of cash coverage, we have got no financial and physical capacity in our departments due to the financial disarray,” Strachan told Sunday Independent.
ANC provincial spokesperson Mafika Mndebele said his party would engage with the municipality to establish how the city would benefit from funding of the team.
“As the ANC we don’t encourage our municipalities to spend money where there is no return on investment,” said Mndebele.
Despite an outcry over the Department of Economic Development and Tourism pledging R20 million to the South African Music Awards (Samas), Mndebele said after conducting its assessment, the ANC discovered that such sponsorship would benefit the province.The research tells us that if those awards come to KwaZulu-Natal they would contribute about R350 million in terms of events, hotels, caterers, informal economy.
“Even in this issue (Royal AM sponsor) we will follow it up to see what the returns would be,” said Mndebele.
In the quickread.co.za website, Mkhize, has been described as one of the richest women in the country with her net worth R300 million.
Her mother Florence Mkhize was honoured by renaming Durban CBD’s Martin West Building, which is eThekwini treasury headquarters, after her (mother).
Mkhize junior has been previously reportedly owning a R25 million worth luxury mansion overlooking the Durban North beach in upmarket La Lucia suburb. Among the top of the range fleet of cars she was said to be driving were Rolls-Royce Phantom, Ferrari 612 Scaglietti, Roll-Royce Ghost and a Lamborghini. It is believed that she in the past years scored government tenders worth more than R1 billion, including construction of thousands of low-cost houses around the province.
The municipality has been under administration for the past few years, but when it was hoping to come out of it early this year, Sithole-Moloi announced in May that its administration would be extended to October 31 because it had again “regressed to a qualified audit outcome”.MARRC chairperson Anthony Waldhausen also said it did not make sense for the broke municipality, which had been “under administration for the past four years” to give away money to a soccer team.
“We submitted a letter to the municipal manager after the council had approved the deal.
“But he has not written back to us, which shows there is no care for the residents, they just want to eat the money,” he said.
Msunduzi’s decision to sponsor Maritzburg United and now Royal AM has encountered unprecedented outcry that has never been experienced by other municipalities that have taken similar decisions.
Eastern Cape’s Nelson Mandela Bay Metro had in 2020 allocated R40.5 million to the Chippa United Football Club. Kaizer Chiefs, Black Leopards and SuperSport United were also sponsored by Polokwane Municipality.
The Umhlathuze Municipality also pledged to donate R3 million to Richards Bay FC but ended up only paying R1 million.