McKinsey and Company Africa, a subsidiary of the global consulting firm McKinsey & Company Inc., has agreed to pay over $122 million to settle charges related to a bribery scheme involving government officials in South Africa. The resolution, announced by the U.S. Department of Justice (DOJ), highlights McKinsey Africa’s role in paying bribes to secure lucrative contracts with South Africa’s state-owned enterprises, Transnet SOC Ltd. and Eskom Holdings SOC Ltd., between 2012 and 2016.
This settlement follows a guilty plea by Vikas Sagar, a former senior partner at McKinsey Africa, who admitted to conspiring to violate the Foreign Corrupt Practices Act (FCPA). Sagar’s involvement included using insider access to obtain confidential information from Transnet and Eskom, allowing McKinsey Africa to submit competitive bids for multimillion-dollar consulting projects. These contracts resulted in $85 million in profits for McKinsey and its South African subsidiary, with a portion of fees channeled as bribes to officials at the state entities.
A Coordinated Global Effort
The settlement, which includes a three-year deferred prosecution agreement (DPA), underscores the DOJ’s increasing collaboration with international authorities to combat corporate corruption. U.S. Attorney Damian Williams noted that this resolution is part of the department’s broader International Corporate Anti-Bribery (ICAB) initiative, launched in 2023, which aims to strengthen partnerships to address corruption globally.
“McKinsey Africa’s actions allowed it to secure contracts through corruption at the expense of public trust,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri. The coordinated efforts of the DOJ and South African authorities, including financial penalties and compliance reforms, reflect a commitment to accountability.
As part of the DPA, McKinsey Africa will pay a $122.85 million penalty, with half credited against payments to South African authorities in related proceedings. In addition to financial penalties, McKinsey has pledged to enhance its compliance protocols, cooperate with ongoing investigations, and report on improvements to its anti-corruption measures.
Consequences and Reforms
McKinsey’s cooperation with investigators played a role in the settlement terms. According to the DOJ, the company voluntarily provided access to key documents and information during the investigation, traced internal financial flows, and produced evidence of misconduct, including efforts to delete incriminating records. McKinsey also implemented several remedial measures, such as suspending business with state-owned enterprises in South Africa and repaying revenues from tainted contracts.
The DOJ acknowledged McKinsey’s steps to strengthen its anti-corruption framework, including new due diligence processes, enhanced risk reviews for public sector clients, and mandatory anti-corruption training for staff in Africa.
A Message of Accountability
Authorities emphasized the broader implications of the settlement. “Corruption comes at a significant cost,” said Eric Shen, Inspector in Charge of the U.S. Postal Inspection Service. “This resolution demonstrates that justice has no borders, and companies engaging in bribery will be held accountable.”
The resolution is a reminder of the DOJ’s resolve to pursue corporate misconduct, particularly when it undermines public trust in critical institutions. With this settlement, McKinsey Africa’s case reinforces the importance of ethical business practices in global markets.
