Zuma Crisis Deepens as Court Orders Release of Graft Report

  • High court orders report to be published by 5 p.m. local time
  • Opposition parties, CEOs protest against state corruption

Zuma 'Corruption' Report Released, What's Next?

The crisis facing South African President Jacob Zuma worsened as the High Court ordered the publication of a report that threatens to expose alleged graft linked to his relationship with a wealthy family and as thousands gathered in Pretoria, the capital, to protest state corruption.

The court ordered the nation’s Public Protector to release the report about the alleged influence of the Gupta family, friends of Zuma, 74, over cabinet appointments and contracts with state companies by 5 p.m. local time. Zuma dropped his request to halt the publication of the report earlier on Wednesday. The rand gained as much as 2.2 percent against the dollar.

EFF supporters demonstrate outside the High Court in Pretoria, Nov. 2.

Photographer: Gianluigi Guercia/AFP via Getty Images

The setback highlights the waning influence of Zuma, who’s been implicated in a succession of scandals since taking office in May 2009. Public calls for him to resign have escalated since Monday when Finance Minister Pravin Gordhan, with whom Zuma has battled for control of the Treasury, won a reprieve from fraud charges that he described as politically motivated. The next day, ANC supporters including a 300,000-member health workers’ union and the Nelson Mandela Foundation urged him to step down.

Numbered Days

“I will be surprised if Zuma were to survive until January,” Prince Mashele, a political analyst at Pretoria-based Centre for Politics and Research, said by phone before the court ruling. “His days are numbered. South Africans will know the contents of the report and from the leaks that we have been seeing, this report is not full of roses for the president.”

Zuma decided to withdraw his legal application “in the interests of justice and a speedy resolution of the matter,” the presidency said in an e-mailed statement. He’ll consider the report and decide whether to challenge it in court, it said.

The controversy over the ombudsman’s report compounded a series of blows to Zuma’s reputation. The Constitutional Court ruled in March that he violated his oath of office by refusing to abide by a directive from the graft ombudsman to repay taxpayer money spent on upgrading his private home. In August local elections, the ANC suffered its worst electoral performance since Nelson Mandela led it to power in 1994 to end apartheid.

Tide Turning

“The tide has turned against Jacob Zuma,” Nicholas Spiro, a partner at London-based Lauressa Advisory Ltd., which advises asset managers, said by e-mail. “There’s an inescapable feeling that he can no longer soldier on for another three years, but hounding him out of office is easier said than done.”

The political upheaval has weighed on South Africa’s rand and bonds and raised the risk of the nation’s credit rating being downgraded to junk. The rand was 1.6 percent stronger against the dollar at 13.3975 by 3:35 p.m. in Johannesburg, erasing an earlier decline of as much as 0.5 percent and leading gains among 31 major and emerging-market currencies tracked by Bloomberg.

The ombudsman’s investigation relates to the dismissal and appointment of cabinet ministers and board members and directors of state-owned companies and possibly corrupt influence in the awarding of state contracts and licenses to companies linked to members of the Gupta family. It was completed just days before Thuli Madonsela’s seven-year term as graft ombudsman came to an end and she was replaced by Busisiwe Mkhwebane, who didn’t oppose the bid to halt the report’s release.

Zuma has come under pressure to explain his relationship with the Guptas, who he says are friends and are in business with his son, after current and former government officials claimed the family tried to influence their decisions. Both Zuma and the Guptas deny wrongdoing.

The National Health and Allied Workers Union, an ANC ally with about 300,000 members, urged Zuma on Tuesday to take the “honorable and courageous decision” and step down before his current term ends in 2019 and for his deputy Cyril Ramaphosa to replace him. The South African Democratic Teachers Union, National Union of Mineworkers and Police and Prisons Civil Rights Union are also set to call for Zuma’s resignation, Johannesburg-based newspaper Business Day reported Wednesday, citing union officials it didn’t identify.

Courts’ Strength

Zuma, whose allies dominate the ANC’s leadership, has denied ever intentionally breaking the law and shrugged off calls to resign. ANC spokesman Zizi Kodwa told broadcaster eNCA that the party wanted to see the evidence presented in the report and that anyone implicated in it could seek legal recourse in the courts.

“This proves that South Africa is a constitutional democracy still, notwithstanding all of the attempts to drive us into an autocratic order,” Zwelinzima Vavi, the former general secretary of the Congress of South African Trade Unions, an ANC ally, told reporters in Johannesburg on Tuesday. “Our justice system is the last line of defense of logic, the constitution and of the interests of ordinary people.”

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