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McKinsey & Company Africa Ltd, a subsidiary of the global consulting firm McKinsey & Company Inc., has agreed to pay USD 122 million to resolve a U.S. Department of Justice probe into bribery allegations involving South African government officials. The settlement, revealed on Thursday, covers actions that are said to have taken place between 2012 and 2016.
The Justice Department charged McKinsey Africa with one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA). Prosecutors contend that the company secured highly profitable consulting contracts by unlawfully influencing South African officials, resulting in significant financial gains for the firm.
In connection with the settlement, McKinsey Africa has entered into a three-year deferred prosecution agreement. Such agreements typically require companies to cooperate fully with investigators, implement compliance reforms, and meet specified conditions to avoid prosecution.
Nicole M. Argentieri, head of the Justice Department’s Criminal Division, described the nature of the allegations, stating, “McKinsey Africa bribed South African officials to obtain lucrative consulting business that generated tens of millions of dollars in profits.”
The settlement follows prior developments involving Vikas Sagar, a former senior partner at McKinsey, who pleaded guilty to one count of conspiracy to violate the FCPA. His admission underscored the role of individual accountability within the broader context of corporate governance.
The case draws attention to the intersection of multinational business practices and corruption risks in emerging markets. South Africa, in particular, faced widespread allegations of corruption during the presidency of Jacob Zuma, a period often referred to as one of “state capture,” in which private entities were accused of exerting undue influence over public institutions for financial gain.
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McKinsey has previously acknowledged its role in controversial dealings with South African state-owned enterprises, including Eskom and Transnet, and agreed in 2018 to repay 1 billion rand (£42 million) as part of a settlement with South African authorities. The latest resolution marks a significant step in addressing allegations of misconduct involving the consulting firm. McKinsey Africa’s agreement with the U.S. government includes substantial financial penalties and reinforces the importance of maintaining rigorous compliance standards across its operations.
While the settlement does not constitute an admission of guilt under U.S. law, it underscores the seriousness with which authorities approach violations of the FCPA and highlights the need for robust safeguards to prevent similar incidents in the future.
