South Africa's Zuma seeks dismissal of graft case

By Serena Chaudhry

PIETERMARITZBURG, South Africa (Reuters) - Jacob Zuma, leader of South Africa's ruling ANC, appeared in court on Monday to push for the dismissal of a corruption case that could stop him becoming president next year.

Over 1,000 supporters demonstrated outside the high court in Pietermaritzburg, singing, chanting and waving placards to denounce charges they say are politically motivated and to try to stop Zuma from being put on trial later in the year.

The case is the biggest obstacle to the African National Congress leader succeeding President Thabo Mbeki. Zuma denies the charges of corruption, fraud, money-laundering and racketeering but says he will step down if convicted.

A long trial might mean Zuma's case overlaps with a general election in 2009, which he would almost certainly win, and the combination could increase political instability in Africa's biggest economy.

Zuma's strong union links worry some investors who see Mbeki's policies as more pro-business, but they are also concerned about continuing uncertainty.

"This could get messy. What if he becomes president and then is found guilty? What will his exit strategy be? I don't know if the ANC has the answer," said Lucy Bethell, an analyst at Royal Bank of Scotland in London.

Zuma's lawyer, Kemp J. Kemp, argued in court that authorities had not followed constitutional procedures in the case.

The ANC leader is accused of taking 783 bribes totaling 4.07 million rand ($564,700) over a 10-year period. Most of the payments were connected to his former financial adviser Schabir Shaik -- serving a 15-year prison sentence for corruption.

He is also accused of soliciting a 500,000 rand bribe from French arms group Thint relating to a massive arms deal arranged by South Africa in the late 1990s.

Charges against Zuma were dropped in 2005 for technical reasons although Mbeki fired him as deputy president.

Prosecutors brought charges again shortly after Zuma beat Mbeki last December to win the ANC leadership. Zuma supporters say the case is a conspiracy by Mbeki loyalists aimed at derailing Zuma's political ambitions.

APPEAL POSSIBLE

The hearing in Pietermaritzburg, where prosecutors say the offences took place, is expected to last two days. If Zuma loses the appeal, he is likely to ask the Supreme Court to have the corruption case dismissed.

Zuma's supporters stood chanting outside the court house in Pietermaritzburg in his eastern Kwazulu-Natal province. Some sat in trees holding up placards. Others sang songs.

"Zuma is being given a raw deal. He is not corrupted ... If he is not the president, South Africa is going to see an anarchic type of government," said Jabulani Ndlovu.