MARUMO Gallants boss Ditonkana Sello has fired a warning shot at Moroka Swallows.
He said the club must repay the R20 million deposit before he heads to court to cancel their sale agreement.
And that's not all.
Sello wants Swallows to also repay the millions of rands he spent settling the South African Revenue Service (Sars) debts and unpaid staff salaries.
Swallows boss David Mogashoa has filed papers in the Joburg High Court, seeking an order to rescind the sale agreement and return the club to the Dube Birds.
Mogashoa claimed Gallants breached the sale agreement when they failed to pay the outstanding balance on the R40 million purchase price.
However, in an affidavit filed in the Joburg High Court, Sello denied any breach of contract.
He said Swallows should have paid back the money before taking the matter to court.
"I am advised that when a party claims rescission and restitution of an agreement, such party is compelled to tender performance which it received under the sale agreement to the other contracting party in order to formulate a valid cause of action," Sello stated in his affidavit.
"In the above matter, the applicant would therefore be required to tender payment of all amounts effected by the first respondent in terms of the sale agreement, which it has failed to do.
"This would include payment of the sum of R20 million, which the applicant admits having received."
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Sello said Swallows' failure to repay the funds "constitutes a material defect".
He asked the court to dismiss the application.
Sello denied Gallants breached the sale agreement by failing to pay the outstanding balance.
He explained how the R40 million purchase price was structured.
He was required to pay R5 million by 10 June 2024 and R15 million on or before 30 June 2024.
Another R10 million was to be set off by taking over Swallows' outstanding Sars tax debt.
The balance of R10 million was to be set off against the takeover of all outstanding salary debts to Swallows staff after the deal was signed.
Sello said after receiving the R20 million, Swallows was obligated to provide Gallants with a signed settlement agreement it concluded with the revenue service.
But the club failed to do so.
"No payment would become due to Sars in the absence of such agreement being provided to the first respondent," he stated.
"In the circumstances, no amount could be said to have become due and payable to Sars by the first respondent in the absence of the settlement agreement being provided."
Sello also argued that transferring Swallows' Sars obligation would require prior consent from the tax collecting institution.
However, no evidence was provided to show that Sars had consented to the transfer of the tax debt.
"The significance thereof is that the first respondent cannot be said to be in breach of a term which is unenforceable," he said.
Sello said he told Mogashoa at a meeting in Sandton, north of Joburg in June 2024 that he did not have the Sars settlement agreement.
"In response, Mogashoa told me that I did not have to worry about effecting any payments to Sars directly and that I was to simply pay the instalments into the applicant's bank account for onward payment by him to Sars," Sello said in his affidavit.
"I specifically recall Mogashoa advising me that it would be far easier and practical for the first respondent to pay into the applicant's bank account so that the first respondent would not have to deal with Sars at all."
Sello said he paid several amounts into the account of Swallows.
As a result, he may have paid in excess of R1 million more than what Swallows owed to Sars.
"This leaves the first respondent in the position where it has paid more than R1 million in excess of the instalments set out in the Sars deferral payment agreement and where it has no idea as to what and how any further payments are to be effected," he said.
Sello said Gallants has also been paying outstanding salaries of Swallows staff since July 2024.
He was concerned that he would end up paying more than the R10 million agreed in the sale agreement.
Sello said given these payments, Swallows cannot claim that Gallants breached the agreement of sale.
Gallants spokesman Sello Nduna said they won't comment because the matter is before court.
Mogashoa also said they were unable to comment because the matter is sub judice.
