FT: Bain finally closes down in SA after business collapses over corruption scandal

Key topics:Bain shuts South Africa consultancy after state capture scandalJohannesburg office shifts to global services support roleReputational damage hampers public and private sector work.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.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.The auditorium doors will open for BNIC#2 on 10 September 2025 in Hermanus. For more information and tickets, click here..By Monica Mark in Johannesburg.Bain & Co has decided to shut its consultancy business in South Africa, where it has struggled to shake off the “stigma” of its role in a corruption scandal that brought down a former president.Alongside McKinsey and KPMG, Bain suffered reputational damage from its involvement in a “state capture” scandal under the presidency of Jacob Zuma, during which key state agencies were hollowed out by graft and stripped of financial assets.In 2022, the Zondo commission investigating widespread corruption in South Africa’s government found that Bain had colluded in “one of the few instances where President Zuma was himself directly and personally involved in the activities and plans to take over a government entity”.Zuma stepped down in 2018 after years of scandals and allegations of corruption, which he denied.In a statement, Bain confirmed it was winding down its consulting operations in South Africa. It said its Johannesburg office would become “a services hub supporting Bain’s global operations, retaining the vast majority of our talented local employees”. Services hubs at professional services firms generally provide back-office functions and do not sell advice directly to clients.The difficulties created by the Boston-headquartered firm’s work in South Africa had contributed to the decision to close down in the country, said a person familiar with the matter. “They already found it difficult to work in the public sector, but increasingly there was a headwind they were facing even with private sector clients and in the recruitment and retention of talent,” the person said.“There was a stigma associated with their past which they weren’t able to satisfactorily address. They decided after some time that it was just too hard — they weren’t going to be able to re-establish themselves as a management consultancy group of integrity.”South Africa’s National Treasury in September 2022 barred Bain from doing business with the state for 10 years, a ban the company moved to fight in the courts.In August 2022 Bain was handed a three-year ban from tendering for UK government contracts. The prohibition was lifted eight months later after the firm launched a legal challenge.In January this year, the UK’s Labour government said it had considered options for reimposing the ban but had been told there were “no legal routes to do so” unless new information emerged.Bain had been brought in by the Zuma government in 2015 to restructure the South African Revenue Services, or SARS, although the tax collection agency was already considered world-class at home and abroad.Over three years, the agency became a shadow of its former self, eventually struggling to carry out basic services including tax collection, and providing housing and electricity.The consultancy group in 2018 admitted that its work for the tax agency fell short of its standards, and refunded all the fees and interest that it had earned from its work for SARS.Stephen York, the managing partner of its South Africa business, said previously that the consultancy regretted playing any role in damaging the tax agency, but maintained that it had been the victim of a “false narrative” and that it had never knowingly conspired in state capture.“We are ashamed of what happened at SARS, but we would like to get back to the work of helping the South African economy grow,” York said in 2022.The company has continued to attract controversy in South Africa, including over its work relating to the G20, for which South Africa currently holds the presidency. The country’s Black Business Council said this month that it would “ask the president to reject” any reports prepared by McKinsey or Bain following their appointments as consultants for the B20, the business arm of the G20, because of their association with the state capture scandal.South Africa’s President Cyril Ramaphosa’s office said it was “concerned” about the firms’ appointment and called on the B20 to “appoint more suitable partners for these important endeavours”..© 2025 The Financial Times Ltd.

FT: Bain finally closes down in SA after business collapses over corruption scandal

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