FT: Briber McKinsey to pay SA another billion after US levies $122m fine

McKinsey has agreed to pay $122mn to U.S. and South African authorities to settle charges linked to corruption during Jacob Zuma's presidency..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..The seventh BizNews Conference, BNC#7, is to be held in Hermanus from March 11 to 13, 2025. The 2025 BizNews Conference is designed to provide an excellent opportunity for members of the BizNews community to interact directly with the keynote speakers, old (and new) friends from previous BNC events – and to interact with members of the BizNews team. Register for BNC#7 here. .By Stephen Foley in New York.Deferred prosecution agreement covers corruption scandal involving state-owned companies during Zuma presidency ___STEADY_PAYWALL___.McKinsey has agreed to pay $122mn to authorities in the US and South Africa over its role in a sprawling corruption scandal during the administration of former South African president Jacob Zuma..The consulting group paid bribes to win millions of dollars of consulting work with South African state-owned companies between 2012 and 2016, according to a deferred prosecution agreement announced by the US justice department on Thursday and a statement by South Africa's National Prosecuting Authority..One of McKinsey's former senior partners in Johannesburg, Vikas Sagar, has also pleaded guilty to participating in a conspiracy to violate the US Foreign Corrupt Practices Act, US prosecutors said on Thursday. The plea was entered in a New York court in 2022 but had been kept under seal while the investigation continued.."McKinsey Africa participated in a yearslong scheme to bribe government officials in South Africa and unlawfully obtained a series of highly lucrative consulting engagements that netted McKinsey Africa and its parent entity McKinsey & Company approximately $85mn in profits," said Damian Williams, the US attorney for the Southern District of New York..McKinsey and Sagar bribed officials at Transnet, South Africa's rail freight monopoly, and the energy company Eskom for information that helped win consulting work, US prosecutors said, by knowingly allowing local partner firms to funnel money to officials at the two state-owned companies..The firm received leniency from US prosecutors in part because it had co-operated with the investigation, the justice department said..In a statement, McKinsey said it conducted an extensive probe of its own into "the corrupt conduct of a former partner, Vikas Sagar, who concealed his unlawful conduct from the company and his colleagues and then sought to cover up his conduct. McKinsey terminated his employment more than seven years ago.".The firm said it was pleased to resolve the investigations and that it was committed to "regaining the trust" of the people of South Africa. The $122mn will be split 50-50 between the US authorities and South Africa's criminal assets recovery account, which funds law enforcement efforts..South African prosecutors have spent years investigating the systematic pilfering of public contracts, known locally as "state capture", during the Zuma presidency, which ended in 2018..Two years ago, an official commission of inquiry concluded that the business dynasty of the Gupta brothers had used influence with Zuma to operate a "racketeering enterprise" at Transnet by receiving contracts that favoured their interests or those of associates. The Guptas and Zuma denied any wrongdoing..Read also:.🔒 McKinsey under criminal investigation for role in opioid epidemic🔒 McKinsey & Co.'s leadership battle: Navigating growth, controversy, and shifting sands – Chris Hughes🔒 McKinsey's Seoul soiree masks consulting industry's wildest headwinds in years.© 2024 The Financial Times Ltd.

FT: Briber McKinsey to pay SA another billion after US levies $122m fine

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