JOHANNESBURG (Reuters) - South African Finance Minister Pravin Gordhan will be charged this year over a surveillance unit at the tax agency he once ran, the City Press reported on Sunday, six days after separate charges were dropped against him.
Gordhan is being investigated for his role in setting up a unit at the tax department a decade ago that is suspected of spying on politicians, including President Jacob Zuma.
The City Press said Gordhan will be charged with fraud and defeating the ends of justice by the end of this year, citing sources at the National Prosecuting Authority (NPA) and the Hawks, a special police branch.
Hawks spokesman Hangwani Mulaudzi questioned the veracity of the report. "How do you charge someone before you have concluded an investigation?" he told Reuters.
An NPA spokesman did not respond to a text message and phone call requesting comment.
The NPA dropped charges against Gordhan last week relating to allegations he fraudulently approved early retirement for a deputy tax commissioner, costing the revenue service 1.1 million rand ($80,000). The City Press broke the story that the charges would be dropped.
The rand rallied after the reports that Gordhan wouldn't be prosecuted, as investors welcomed a reprieve for a finance minister respected by markets.
Gordhan has said none of the charges have any merit.
Analysts believe political turmoil in recent months is the result of a power struggle between Gordhan and Zuma over, among other things, the issuing of government tenders to Zuma's wealthy business friends and their influence over the ANC.
Zuma and Gordhan have both said they support each other.
South Africa's anti-graft watchdog called for a judge to investigate allegations of influence by the Indian Gupta family, in a report released last week as thousands of protesters called for the president to step down.
The Gupta family and Zuma deny any wrongdoing.
In his first public appearance since the investigation was released, Zuma told supporters on Saturday he wasn't scared to go to prison.
(Writing by Joe Brock, editing by Larry King)