McKinsey Africa will pay $122M for bribery in South Africa

McKinsey & Company Africa Ltd, a subsidiary of the global consulting giant, has agreed to pay over $122 million (around R2.34 billion) to settle U.S. charges tied to a South African bribery scheme, the U.S. Justice Department announced on Dec. 5.

The firm admitted to paying bribes to officials at Eskom, South Africa’s state-owned energy provider, and Transnet, a freight and logistics company, in exchange for access to confidential information on consulting contracts.

This scheme generated an estimated $85 million (approximately R1.63 billion) in profits for McKinsey and its Africa branch.

The company has entered a three-year deferred prosecution agreement, pledging to cooperate with investigators and strengthen its anti-corruption measures. The settlement includes a significant penalty payable in South Africa.

Vikas Sagar, a former senior McKinsey partner, earlier pleaded guilty to conspiracy to violate the U.S. Foreign Corrupt Practices Act. McKinsey stated that Sagar concealed his misconduct from the firm and was terminated when the issues came to light.

This bribery scandal highlights inefficiencies at Eskom and Transnet, which have hindered South Africa’s economic growth for over a decade.

In addition to this case, McKinsey is in talks to pay over $600 million (about R11.5 billion) to resolve a separate investigation into its role in advising opioid manufacturers accused of fueling the U.S. addiction crisis.

The company has also offered some employees nine months’ pay to voluntarily leave as part of internal restructuring.