McKinsey & Company has agreed to pay $123 million as part of a three-year deferred prosecution agreement (DPA) to resolve allegations of bribery involving officials at two South African state-owned enterprises. If McKinsey adheres to the agreement’s conditions, the charges will be dismissed.
The consulting giant was investigated for facilitating bribes between 2012 and 2016 to secure confidential information and lucrative contracts from Eskom, South Africa’s largest energy utility, and Transnet, a freight rail and port operator. Court documents reveal that a senior McKinsey partner orchestrated payments to officials at these entities in exchange for insider information, enabling the firm to win multimillion-dollar consulting deals. McKinsey Africa partners reportedly funneled a portion of their fees as bribes.
The U.S. Department of Justice (DOJ) confirmed that McKinsey and its African subsidiary earned approximately $85 million in profits from these deals. Consequently, McKinsey was charged with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) in New York.
“McKinsey Africa bribed South African officials to obtain highly profitable consulting work, generating tens of millions of dollars in profits,” stated Principal Deputy Assistant Attorney General Nicole Argentieri of the DOJ’s Criminal Division.
Vikas Sagar, a former McKinsey senior partner, also pleaded guilty to conspiring to violate the FCPA. In response, McKinsey stated that Sagar had acted independently and was subsequently dismissed. The firm emphasized that it had returned the fees to Eskom and Transnet years ago.
In a statement, McKinsey expressed regret: “We publicly apologized in 2018 and took accountable actions, including assuming responsibility for Sagar’s actions. McKinsey today operates with strengthened governance and ethical standards.”
The settlement includes penalties in South Africa, with McKinsey reiterating its commitment to closing this chapter responsibly and moving forward with reformed practices.
