This photograph shows the logo of American multinational corporation McKinsey & Company on the first day of Mobile World Congress (MWC), the largest annual gathering of the telecom industry, in Barcelona on February 26, 2024.
Pau Barena | Afp | Getty Images
A subsidiary of top global consulting firm McKinsey & Company has agreed to pay nearly $123 million to settle claims it bribed government officials in South Africa. The US Department of Justice said Thursday.
Federal prosecutors also overturned a 2022 guilty plea by Vikas Sagar, a former McKinsey senior partner who worked in the South African subsidiary office.
Sagar, 56, Johannesburg, Confessed US District Court for the Southern District of New York, for one count of conspiracy to violate the Foreign Corrupt Practices Act.
A subsidiary, McKinsey Africa, paid bribes to officials of two South African state-controlled utility companies between 2012 and 2016 to obtain lucrative consulting contracts, the DOJ said in a press release.
Prosecutors said McKinsey Africa obtained confidential information from two companies, Transnet SOC Ltd and Eskom Holdings SOC Ltd, about contracts during the bidding process.
The DOJ said it then submitted multi-million dollar consulting engagement proposals knowing that other South African consulting firms it partnered with would pay part of their fees as bribes to Transnet and Eskom officials.
According to prosecutors, the bribery scheme helped McKinsey and McKinsey Africa make about $85 million in net profits.
Prosecutors said McKinsey Africa entered into a three-year deferred prosecution agreement with the DOJ related to a criminal charging document against McKinsey Africa with one count of conspiracy to violate the FCPA’s anti-bribery provisions.
The deferred prosecution agreement requires McKinsey Africa to accept liability for the allegations.
“McKinsey Africa engaged in a serious and long-term bribery scheme to obtain contracts by corrupting government officials,” FBI Criminal Investigative Division Assistant Director Chad Yarbrough said in a press release.
“This misconduct is a clear violation of the law and a violation of the public trust. No matter what country the crime occurs in, the FBI always works closely with our international partners to root out corruption,” said Yarbaugh.
“McKinsey welcomes the resolution of these matters and the closure of this regrettable situation,” McKinsey Africa said in a statement on Thursday.
“McKinsey is a different organization today than it was when these matters first occurred,” the affiliate said. Upgrades to controls.”
