By Jon Herskovitz
POLOKWANE, South Africa (Reuters) - ANC outcast Julius Malema was charged with money laundering on Wednesday but emerged from court unbowed to attack South African President Jacob Zuma as the "illiterate" leader of a "banana republic".
Expelled from the African National Congress for ill-discipline, Malema has capitalized on wildcat miners' strikes to emerge as a champion for impoverished blacks whose lives have changed little since apartheid ended in 1994.
At a ten-minute hearing in Polokwane, capital of Malema's native Limpopo province, prosecutors accused the former ANC youth leader of "improperly" receiving 4.2 million rand ($514,000) in a conspiracy involving state tenders.
Having ditched his trademark Che Guevara-style black beret and t-shirt for a grey suit and red tie, Malema emerged to play the crowd with an irreverent roasting of Zuma, who faces an internal ANC leadership election in December.
"He can stick the charges up his ass," Malema said in the native Pedi language, to cheers and laughter from around 1,000 supporters hemmed in by police and razor wire in Polokwane, 350 km (220 miles) north of Johannesburg.
Prosecutors, he said, were simply taking orders from Zuma to "catch this boy". "In South Africa, a banana republic, being next to Julius Malema is a criminal offence," he added.
"I've never been part of any criminal activity. I will never be part of any criminal activity," Malema said.
"They are sent by Jacob Zuma because Jacob Zuma knows nothing - the illiterate Jacob Zuma," he added. "I'm unshaken. I'm not intimated by nonsense. They are wasting time."
There was no immediate response from the presidency to Malema's public tirade. The ANC rejected his allegations of meddling in the legal system as an "insult to law enforcement agencies who are totally independent of government".
In an interview with Reuters last week, Zuma dismissed Malema as being "just talk".
The fast-living 31-year-old was expelled from Nelson Mandela's 100-year-old liberation movement and ousted as leader of the ANC Youth League in April.
His waning political star rose again in August when he latched on to the police killing of 34 striking platinum miners - the bloodiest security incident since white-minority rule ended - as evidence of Zuma abandoning the plight of the poor.
Since the "Marikana massacre", Malema has become the main face of an "Anyone But Zuma" campaign dividing the ANC. The party - along with Zuma - was criticized for its sluggish response to the police shootings and wider mining industry unrest.
Malema said he would visit the city of Rustenburg on Thursday to stir up workers at the world's biggest platinum mine, owned by Impala Platinum.
"I'll continue with the struggle for economic freedom," he bellowed in a comment likely to further jangle the nerves of business leaders and investors in Africa's largest economy.
The mine, which accounts for 15 percent of global supply of the precious metal, shut down for six weeks in January when a turf war between the dominant National Union of Mineworkers - a key ANC ally - and the militant Association of Mineworkers and Construction Union (AMCU) boiled over into violent industrial action.
Since then, the unrest has spread from the platinum sector into gold, with number three bullion producer AngloGold Ashanti saying this week nearly all its South African mines had been hit by a walkout by most of its 35,000 workers.
"ABUSE OF POWER"
After the hearing, Malema was released on bail of 10,000 rand.
He had been under investigation for months for suspected corruption, fraud and money laundering in Limpopo, a region where the Treasury says hundreds of millions of dollars of public money go missing each year.
Malema's penchant for luxury cars, Swiss watches and champagne has also attracted the attention of South Africa's Revenue Service, which said at the weekend he owed nearly $2 million in unpaid taxes.
No charges for fraud or corruption were brought on Wednesday - contrary to South African media reports and fuelling a sense among Malema supporters that prosecutors were struggling to build a case against him.
"This case is an abuse of power by Zuma against Malema," supporter Sonett Masemola told Reuters outside the court.
His followers held a raucous vigil on Tuesday night, and many said he was being brought to trial to sideline him ahead of the ANC meeting in December at which Zuma is front-runner to be re-elected head of the dominant party in South Africa.
"He gets more support than President Zuma because he is more in touch with the people and more intelligent," said Luterdo Mothurwane, dressed in ANC Youth League garb.
($1 = 8.1665 South African rand)
(Reporting by Jon Herskovitz; Writing by Ed Cropley; Editing by Pascal Fletcher)