By Joe Parkinson in Pretoria, South Africa and Gabriele Steinhauser in Johannesburg
South African President Jacob Zuma should appoint a commission of inquiry into whether his dealings with a wealthy business family led to undue influence over government appointments and contracts, according to an official investigative report released Wednesday.
The report, whose publication had been blocked for weeks by court bids from Mr. Zuma and two of his ministers, says that there were "worrying" indications that the wealthy Gupta family, Indian immigrants who own a business empire spanning from mining to defense, stirred the appointments of ministers in Mr. Zuma's government.
"It appears crimes have been committed," the report says. The report reveals the examination of the cellphone records of Mr. Zuma and several of his ministers and says they support the allegations against the president made by several witnesses.
It also says that "extensive financial analysis" suggests that a mining company owned by the Guptas, and in which Mr. Zuma's son Duduzane holds a significant stake, was given lucrative government contracts to finance its expansion. The Guptas have said all their contracts were legal and in line with normal government practices.
The report doesn't make definitive findings, saying that its author, then-Public Protector Thuli Madonsela, wasn't given sufficient resources to conduct a full investigation. Instead, a full probe of Mr. Zuma's dealings with the Guptas should now be conducted by a commission of inquiry, with its findings to be published within 180 days, the report says.
But the allegations listed in Wednesday's report are bound to shake up Mr. Zuma's African National Congress, which has ruled South Africa since the end of apartheid in 1994.
In one section, Deputy Finance Minister Mcebisi Jonas recounts how in the presence of Mr. Zuma, one of the Gupta brothers, Ajay, offered him the post of finance minister--along with 600,000 rand--during a meeting at the family's compound in Johannesburg.
Ajay Gupta "asked if Mr. Jonas had a bag which he could use to receive and carry R600,000 in cash immediately, which he declined," the report says, summarizing Mr. Jonas's statements to the public protector.
Six weeks after the alleged meeting, then-Finance Minister Nhlanhla Nene was ousted and replaced by Zuma ally Des Van Rooyen. Mr. Van Rooyen himself was removed four days later, following a steep drop in the rand and other South African assets.
The report also says that Mr. Van Rooyen visited the home of the Guptas on at least seven occasions, including the day before he was appointed. "This looks anomalous given that at the time he was a Member of Parliament based in Cape Town," the report says.
Mr. Van Rooyen is now cooperative governance minister and along with Mr. Zuma initially sought to prevent the publication of the report. Both Mr. Van Rooyen and Mr. Zuma have denied any wrongdoing. Mr. Zuma's lawyer has said that the president hadn't been given sufficient time to respond to the allegations made in the report, nor the opportunity to question witnesses.
In a statement following the report's publication, Mr. Zuma's office said that "the President will give consideration to the contents of the report in order to ascertain whether it should be a subject of a court challenge."
Opposition leaders have said the findings in the report could lead to the impeachment of the president.
"That report must be released so that we can hold all of those whoare culpable in that report accountable," Mmusi Maimane, the leader of the opposition Democratic Alliance, said earlier Wednesday. "Jacob Zuma must resign, because Jacob Zuma is unfit to hold the office of the president."
The report could mark a turning point in a brutal leadership battle in the African National Congress.
Mr. Zuma, whose second term in office ends in 2019, has openly fought with Finance Minister Pravin Gordhan over control of state finances, including the running of state-owned enterprises, anticorruption agencies and the central bank.
Ratings firms have warned that political infighting could lead to South African bonds being downgraded to junk status.
The outcome of the struggle inside the ANC is likely to dictate the path of Africa's most advanced economy--still reeling from the collapse of commodity prices, weak growth and stubbornly high unemployment--for the next decade.
The political drama wasechoed on Pretoria's streets, as thousands of antigovernment protesters marched to the Union Buildings--the seat of South Africa's government--and demanded Mr. Zuma's resignation. Some demonstrators began throwing rocks and police repelled them with tear gas, rubber bullets and water cannons.
Police and protesters engaged in cat-and-mouse battles in the blocks that crisscross Pretoria's central business district. Demonstrators torched tires and garbage bins, while riot police used roadblocks to limit their movement.
In the grounds of the city's St. Albans Cathedral, placard-waving demonstrators attended the first assembly held by Save South Africa--a new group of business, civil society and disaffected ANC officials against government corruption.
In nearby streets, South Africa's two largest opposition parties--the center-right Democratic Alliance and the leftist Economic Freedom Fighters--held their own protests, calling forMr. Zuma to respect the constitution and to step down.
Each protest had different messages, but they were unified by one theme: dissatisfaction with the leadership of Mr. Zuma, whom they accuse of presiding over a dramatic expansion of cronyism and graft.
"For as long as we have Zuma as president of the country it is not possible to turn the country around," said Sipho Pityane, a former ANC director-general of foreign affairs and chairman of mining giant AngloGold Ashanti. "At the heart of the problem, we have a leader who is without honor or integrity."
Write to Joe Parkinson at email@example.com and Gabriele Steinhauser at firstname.lastname@example.org
(END) Dow Jones Newswires
November 02, 2016 12:30 ET (16:30 GMT)
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