McKinsey & Company’s African subsidiary has agreed to pay over $122 million to settle U.S. government charges of bribery and illegal business practices in South Africa.
The Justice Department announced Wednesday that McKinsey Africa deliberately paid bribes to government officials between 2012 and 2016 to secure lucrative consulting contracts with two state-owned companies: Transnet, which manages South Africa’s transportation infrastructure, and Eskom, the national energy company.
According to court documents, McKinsey worked with local consulting partners to obtain confidential information and win multi-million dollar contracts through illegal means. As a result, the company earned approximately $85 million in profits from these corrupt dealings.
A former senior partner at McKinsey, Vikas Sagar, has already pleaded guilty to conspiracy charges related to the scheme.
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“McKinsey Africa bribed South African officials in order to obtain lucrative consulting business that generated tens of millions of dollars in profits,” said Nicole M. Argentieri, head of the Justice Department’s Criminal Division.
U.S. Attorney Damian Williams was equally direct, stating that the company repeatedly won contracts “through corruption and bribes at two different state-owned entities in South Africa.”
As part of the settlement, McKinsey has agreed to a three-year deferred prosecution agreement. The company has also taken several steps to address the misconduct, including:
- Removing the partner involved in the bribery scheme
- Conducting additional anti-corruption training
- Temporarily stopping work with state-owned enterprises
- Improving background checks for business partners
- Voluntarily repaying all revenues from the tainted contracts
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