South Africa court deals blow to Zuma in graft case

By Serena Chaudhry

JOHANNESBURG (Reuters) - South Africa's highest court on Thursday rejected ruling ANC party leader Jacob Zuma's attempt to stop seized evidence being used against him in a corruption trial.

Zuma's battle against the charges is likely to decide whether the African National Congress leader takes over from President Thabo Mbeki next year, a leadership change that concerns investors comfortable with Mbeki's pro-business tilt.

Zuma has strong ties to trade unions and the left, which are supporting him in the corruption case. But he has suffered legal defeats, with the ruling by the Constitutional Court on Thursday appearing to clear the way for a trial.

"It is a very serious setback (for Zuma)," said Susan Booysen, a political analyst at South Africa's University of the Witwatersrand. "Today's ruling really strengthens the hand of the NPA (National Prosecuting Authority)."

Nine of the 10 Constitutional Court judges ruled that warrants used in raids on Zuma and his lawyer were valid and the state could use seized documents in its prosecution.

In another blow to Zuma, the court allowed for the use of a diary and other documents from Mauritius in the trial. Zuma had tried to block the NPA from obtaining the documents.

"We are certainly very pleased with the outcome today," NPA spokesman Tlali Tlali said after the ruling by the court in Johannesburg. "The NPA is court ready."

Zuma is accused of accepting hundreds of thousands of dollars in bribes from a French arms firm. He denies the charges and is expected to go on trial this year for corruption, money-laundering, fraud and racketeering.

His supporters call the case a conspiracy by loyalists of Mbeki, who must step down next year. They say state organs were used to smear Zuma and derail his political ambitions.

ANC SUPPORTS ZUMA

The ANC said it respected the Constitutional Court ruling but remained disturbed by aspects of the investigation and would continue to support Zuma.

"The ANC reiterates its view that the manner in which this case has been handled by the authorities over the last few years has reinforced the perception that the ANC president is being persecuted rather than merely prosecuted," it said.

"It has also fuelled doubts about his chances of receiving a fair hearing."

Mbeki fired Zuma as deputy president in 2005 after the arms scandal broke, and Zuma was later charged with bribery and fraud. His corruption case collapsed in 2006 on procedural matters, but prosecutors charged him again in 2007.

A protracted trial could mean Zuma's case eventually overlaps with general elections in 2009, potentially causing further political instability in Africa's largest economy.