McKinsey & Company’s South African subsidiary has agreed to pay over $122 million to resolve a U.S. Department of Justice investigation into a bribery scheme involving South African government officials.
The settlement follows allegations that the consulting firm, through its subsidiary McKinsey Africa, paid bribes to secure lucrative contracts with state-owned enterprises, Transnet and Eskom, between 2012 and 2016.
The Justice Department announced the resolution alongside a coordinated agreement with South African authorities. McKinsey Africa has entered a three-year deferred prosecution agreement (DPA) with the U.S. government, admitting to a conspiracy to violate the Foreign Corrupt Practices Act (FCPA).
Court filings reveal that McKinsey Africa, acting through a senior partner, secured confidential information to gain an advantage in bidding for multimillion-dollar consulting contracts. The firm partnered with local consultants who funneled portions of their fees as bribes to officials at Transnet and Eskom. The scheme generated approximately $85 million in profits for McKinsey Africa and its parent company.
Vikas Sagar, a former senior partner at McKinsey Africa, had previously pleaded guilty to conspiring to violate the FCPA. As part of the settlement, McKinsey Africa will pay a $122.85 million criminal penalty, half of which may be credited toward fines imposed by South African authorities.
“This resolution shows that corruption will not be tolerated, regardless of industry or prominence,” said U.S. Attorney Damian Williams.
What to know
McKinsey and its South African unit have pledged to implement extensive compliance measures, including enhanced due diligence protocols, anti-corruption training, and stricter oversight of engagements with public sector clients. The company has also repaid revenues from potentially tainted contracts awarded by Transnet and Eskom.
The settlement reflects a 35% reduction in the criminal penalty, acknowledging McKinsey’s proactive cooperation, including extensive internal investigations, the production of key evidence, and the dismissal of implicated employees.
More insight
The resolution marks the third coordinated case between U.S. and South African authorities within two years, signaling increased international cooperation under the Justice Department’s International Corporate Anti-Bribery initiative.
“McKinsey Africa’s conduct violated the public trust and distorted fair competition,” said Nicole Argentieri, Principal Deputy Assistant Attorney General. “This case demonstrates our commitment to rooting out corruption wherever it occurs.”
Investigations were led by the FBI and the U.S. Postal Inspection Service, with assistance from South African authorities.
This case adds to mounting scrutiny of multinational corporations operating in emerging markets, highlighting the financial and reputational risks of failing to uphold global anti-corruption standards.
