This photo shows the logo of the American multinational company McKinsey & Company on the first day of Mobile World Congress (MWC), the telecommunications industry’s largest annual gathering, held in Barcelona on February 26, 2024.
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A subsidiary of McKinsey & Company, one of the world’s top consulting firms, has agreed to pay nearly $123 million to resolve allegations of bribery of South African government officials. The US Department of Justice stated: Thursday.
Federal prosecutors also unsealed a 2022 guilty plea by Vikas Sagal, a former senior partner at McKinsey & Co. who worked in the subsidiary’s South African office.
Sagar (56), who lives in Johannesburg. pled guilty to Indicted in the United States District Court for the Southern District of New York on one count of conspiracy to violate the Foreign Corrupt Practices Act.
The subsidiary McKinsey Africa paid bribes to executives at two South African state-owned utility companies between 2012 and 2016 to secure lucrative consulting contracts, the Department of Justice said in a press release.
Prosecutors said McKinsey Africa obtained confidential contract information from two companies, Transnet SOC and Eskom Holdings SOC, during the bidding process.
Subsequently, other South African consulting firms with whom they had partnered submitted proposals for multi-million dollar consulting contracts, with the knowledge that part of the fees would be paid as bribes to Transnet and Eskom officials, the court heard. the ministry said.
Prosecutors say the bribery scheme netted McKinsey and McKinsey Africa about $85 million in profits.
McKinsey Africa has entered into a three-year deferred prosecution agreement with the Justice Department in connection with a criminal complaint, known as an information, charging McKinsey Africa with one count of conspiracy to violate the FCPA’s anti-bribery provisions, prosecutors said. announced.
The deferred prosecution agreement requires McKinsey Africa to accept responsibility for the allegations.
“McKinsey Africa engaged in a serious and long-standing bribery scheme to corrupt government officials and secure contracts,” Chad Yarbrough, assistant director of the FBI’s Criminal Investigation Division, said in a press release.
“This misconduct is a clear violation of the law and a violation of public trust,” Yarbaugh said. “No matter where the crime occurred, the FBI will always work closely with our international partners to root out corruption.” said.
“McKinsey welcomes the resolution of these matters and the end of this unfortunate situation,” McKinsey Africa said in a statement on Thursday.
“McKinsey is a very different company today than it was when these issues first arose,” the subsidiary said. “As soon as we learned of these issues, we terminated Mr. Sagar and waived his fees with interest.” He returned it, cooperated with the authorities, and made a large profit.” Upgrade your risk, legal and compliance management to ensure McKinsey sets the standard across our profession. ”
