McKinsey and Company’s African branch has agreed to pay $122.8 million to resolve a bribery investigation involving South African officials. The U.S. Justice Department confirmed the settlement on Thursday.
The global consulting giant’s African subsidiary, McKinsey Africa, was accused of bribing officials from Transnet Ltd. and Eskom Holdings Ltd. These state-owned entities were responsible for overseeing South Africa’s ports, rails, pipelines, and energy supply.
The bribes were part of a scheme to secure lucrative consulting contracts. Between 2012 and 2016, McKinsey Africa obtained confidential information from both companies, which helped them submit contract proposals.
The Justice Department revealed that McKinsey Africa knowingly collaborated with South African consulting firms, who paid bribes to officials in exchange for securing contracts. The company’s actions reportedly generated profits totaling approximately $85 million.
In addition to the financial penalty, Vikas Sagar, a former senior partner in McKinsey Africa’s South Africa office, pleaded guilty to conspiring to violate the Foreign Corrupt Practices Act.
The case highlights the widespread corruption that plagued South Africa under former President Jacob Zuma, particularly within Eskom, the country’s primary energy provider. During this period, the company was at the center of a massive corruption scandal, with millions of dollars allegedly diverted through fraudulent contracts.
The deferred prosecution agreement reached between McKinsey Africa and U.S. authorities brings an end to the lengthy investigation, though the broader consequences of the scandal continue to unfold.