The South African subsidiary of the McKinsey & Company consulting firm has agreed to pay $122 million to resolve its role in a scheme to bribe South African government officials.
McKinsey Africa entered into a three-year deferred prosecution agreement with the department in connection with a criminal information filed in the Southern District of New York charging the company with one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act.
Vikas Sagar, a former senior partner of McKinsey who worked in the company’s Africa’s South Africa office, had already pleaded guilty to one count of conspiracy to violate the FCPA.
According to court documents and admissions, McKinsey Africa, acting through a senior partner and for the benefit of McKinsey, agreed to pay bribes to then-officials at Transnet SOC Ltd., South Africa’s state-owned and state-controlled custodian of ports, rails and pipelines, and at Eskom Holdings SOC Ltd., South Africa’s state-owned and state-controlled energy company.
Between at least 2012 and 2016, McKinsey Africa obtained sensitive confidential and non-public information from Transnet and Eskom regarding the award of lucrative consulting contracts and submitted proposals for multimillion-dollar consulting engagements, while knowing that South African consulting firms with which McKinsey Africa had partnered would pay a portion of their fees as bribes to officials at Transnet and Eskom.
As a result of the bribery scheme, McKinsey and McKinsey Africa earned profits of approximately $85 million.
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Chris Graham
