The Eastern Cape franchise make their debut in Super Rugby next year and have embarked on a recruitment drive to ensure that they are competitive, so this ruling will come as a major blow.
The Port Elizabeth-based franchise asked SARU for special dispensation to be allowed more than two overseas players in their squad.
Kings boss Cheeky Watson told this website that they were hoping to sign up to six overseas players, but that was dismissed in an official statement from SARU following an Exco meeting on Friday.
The statement read: "The South African Rugby Union confirmed on Friday that the status quo remained unchanged regarding the number of overseas players permitted in South African Super Rugby squads.
"The present allowance of two is unchanged."
This means that with Kiwi prop Clint Newland and Samoan wing Paul Perez already on their books, the Kings will not be able to sign any more overseas players, despite the fact that they announced the signing of Pumas scrumhalf Nicolas Vergallo and Blues utility back Hadleigh Parkes earlier this week.
Earlier the Kings unveiled Western Province flyhalf Demetri Catrakilis among their first batch of high-profile signings.
Kings President Cheeky Watson told a media briefing in Port Elizabeth that Catrakilis, Free State Cheetahs centre Andries Strauss and Sharks lock Steven Sykes have all signed two-year contracts with the Kings - effective on November 2012.
Watson told this website that they are looking to unveil their next batch of signings next week.
However, that might prove to be problematical now.
Source: Rugby 365
