Publication: Business Day Issued: Date: 2006-11-06 Reporter: Reuters Reporter:

Zuma Shaken as Shaik Loses Graft Appeal



Business Day

Date 2006-11-06



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The Supreme Court of Appeal dented former deputy president Jacob Zumaís chances of becoming the next president today when it confirmed corruption convictions against his former financial adviser Shabir Shaik.

The court said Shaik was "correctly convicted" on all three counts against him.

The ruling is likely to increase the possibility that Zuma could face new charges after an earlier graft case against him was dismissed. Such a step by prosecutors could hobble his presidential hopes.

"We find a wealth of evidence to show that the friendship (between Shaik and Zuma), which we accept exists, was persistently and aggressively exploited by Mr Shaik for his own and his groupís advantage," said the courtís ruling, read out by Judge Craig Howie.

"The only reasonable inference is that the payments were corruptly made to influence Mr Zuma to act in conflict with his constitutional duties ... all the appeals are dismissed."

The court also upheld Shaikís sentence of 15 years in jail.

Legal experts said Shaikís lawyers could try to appeal to the Constitutional Court - the highest in the land - but there might not be sufficient constitutional grounds for this.

"I canít believe it," Shaik told the Independent Newspaper Group. "Boom, boom, boom, 1, 2, 3, they didnít uphold anything. All the lawyers were wrong about what was going to happen."

Shaik had been scheduled to take part in a news conference after the ruling, but pulled out at the last minute.

"He would rather spend this time gathering his thoughts," his brother Mo Shaik told reporters.

Shaik was convicted of corruption and graft last year by a judge who said he had a "generally corrupt" relationship with Zuma, long seen as the frontrunner to succeed Thabo Mbeki when he finishes his second and final term as president in 2009.

Zuma was later dismissed as deputy president by Mbeki, opening some of the deepest rifts in the ruling African National Congress (ANC).

Zuma has denied wrongdoing and said he is the victim of a political conspiracy designed to thwart his presidential hopes.

Prosecutors charged Zuma himself with corruption, but that case was tossed out of court in September in what was seen as a humiliating setback for the State.

National Prosecuting Authority spokesman Makhosini Nkosi said new charges could be laid against Zuma. "One of the reasons the State was not ready to proceed (in September) was this very matter that was finalised today," he said.

Zuma was reportedly out of the country today. The uncertainty over Zuma - who remains deputy president of the ANC and thus a de facto candidate for party leadership at an ANC congress next year - has kept markets jittery.

Some analysts highlight Zumaís support from ANC left-wingers and allies unhappy with Mbekiís market-oriented policies.

The Johannesburg Top-40 index of blue-chip stocks firmed slightly after the verdict while the rand, which dealers had said might have been hit by a decision to uphold the appeal, was little changed.

With acknowledgement to Reuters and Business Day.