McKinsey & Company's subsidiary, McKinsey Africa, has agreed to pay $123 million to settle allegations of bribery involving South African government officials.
The consulting firm is accused of engaging in corrupt practices to secure contracts with state-controlled utility companies. The allegations date back to a period between 2012 and 2016, during which McKinsey Africa reportedly paid bribes to officials at Transnet SOC Ltd. and Eskom Holdings SOC Ltd.
The firm obtained confidential information from these companies, allowing it to submit multimillion-dollar proposals while knowing that local consulting partners would funnel part of their fees as bribes to the officials involved.
As part of the legal proceedings, a former senior partner at McKinsey, Vikas Sagar, pleaded guilty to conspiracy charges related to the Foreign Corrupt Practices Act (FCPA).
McKinsey Africa has entered into a three-year deferred prosecution agreement with the U.S. Department of Justice (DOJ), requiring the firm to accept responsibility for its actions and implement significant reforms to its compliance and risk management practices.
The settlement highlights the importance of holding corporations accountable for corrupt practices and raises broader questions about ethical practices in the consulting sector and the responsibilities of multinational corporations.