South Africa's Zuma to be tried for corruption: lawyer

By Paul Simao and James Macharia

JOHANNESBURG (Reuters) - South African prosecutors on Friday ordered ANC leader Jacob Zuma to stand trial for corruption next August, a move that could jeopardize his presidential ambitions.

Zuma was elected leader of the African National Congress last week. Prosecuting him could deepen divisions within the ruling party and derail his hopes of succeeding President Thabo Mbeki, who must step down in 2009.

Defense lawyer Michael Hulley, who has accused the country's National Prosecuting Authority (NPA) and its elite FBI-style Scorpions unit of trying to smear Zuma, said Zuma was charged with racketeering, money laundering, fraud and corruption.

Zuma's trial will begin on August 14, 2008, Hulley said.

"These charges will be vigorously defended, in the context of the belief that the Scorpions (NPA) have acted wrongly and with improper motive calculated to discredit Mr. Zuma and ensure that he play no leadership role in the political future of our country," Hulley said in a statement.

The prospect that the frontrunner to become South Africa's next president could be embroiled in a lengthy trial that may overlap with the next general election in 2009 could heighten investor concerns about the country's stability.

It may also distract the ANC-led government at a time when it is battling one of Africa's worst AIDS epidemics, high levels of violent crime and demands by the black majority for a greater share of the growing economy.

Zuma recently told the BBC that he would step down as ANC leader if he was found guilty in a trial.

At a yearly Christmas party held earlier in the KwaZulu-Natal province, Zuma handed out presents to hundreds of children. Asked about whether he knew the indictment papers had been served on him, Zuma told SABC: "It's the first time I'm hearing that. I haven't heard of anything of that nature."

South Africa's rand eased to 6.8398 to the dollar, from about 6.8030 before news that Zuma had been charged broke, but later recovered. The stock market was closed by the time news of the fresh charges against Zuma emerged.

The Zuma indictment comes more than a year after an earlier corruption case against him collapsed on procedural grounds. The NPA has continued to investigate allegations that Zuma accepted bribes and committed fraud in connection with an arms deal involving a subsidiary of a French company.

Mbeki fired Zuma as the country's deputy president in 2005 as a result of the corruption scandal.

The opposition Democratic Alliance party said it was time Zuma faced the charges and accept the outcome of a trial.

"Jacob Zuma has long since demanded his day in court, and has repeatedly made public statements that a legal proceeding will exonerate him from all suspicions ... yet he has done everything possible to delay and avoid the judicial process taking its course," the party said in a statement.

"SOUR GRAPES"