The $14,000 painting of President Jacob Zuma had already been sold when two men defaced the artwork with black and red paint, the BBC reported.
Footage from a security camera showed a man in a suit painting a red cross over the president's face and genital area. A second attacker wearing a hooded top used his hands to rub black paint over the president's face and down the canvas.
The painting by white Cape Town artist Brett Murray, titled "The Spear," depicted Zuma as Soviet leader Vladimir Lenin, the Los Angeles Times reported.
Zuma argued the work violated his constitutional right to privacy and asked a court to have it taken down. He is also taking legal action to force a South African newspaper to remove a copy of the painting from its Web site.
The work has been condemned by the African National Congress.
"It's rude, it's crude, it's disrespectful, it's racist," said ANC Secretary-General Gwede Mantashe. "We have not outgrown racism in our 18 years."