Cape Town - Mabala Noise has let go of the company's media liaison officer - Mhlo Gumede - with immediate effect.
In a statement released to the press the record company alleged that Gumede has been extorting money from up-and-coming artists with the promise of a record deal.
According to the statement Gumede is also accused of embezzling money from the company and Mabala Noise is currently pursuing criminal charges against the former employee.
The shocking reports come after the company annouced restructuring within the label, which includes releasing and giving clearance to a number of artists.
"It's never an easy decision to part ways with people who were previously an integral part of your team or ecosystem. The decisions I make at Mabala Noise are always well thought through and are never emotional. I will maintain the personal relationships I have with former colleagues and artists, and I wish all of them the best in their future endeavours," further expresses Reggie Nkabinde.
Gumede is married to singer Kelly Khumalo's sister, Zandile Khumalo.
We've reached out to Gumede for comment and will update the story when we receive a reply.