McKinsey Africa to Pay $122 Million Over Bribery Scheme Involving South African Officials

McKinsey & Company Africa (Pty) Ltd (McKinsey Africa) will pay $122 million to resolve charges of bribing South African government officials in a years-long scheme. The U.S. Department of Justice (DOJ) announced the settlement as part of a coordinated effort with South African authorities, underscoring the growing international push against corporate corruption.

Between 2012 and 2016, McKinsey Africa partnered with South African consulting firms to pay bribes to officials at Transnet and Eskom, the state-owned entities responsible for managing South Africa’s infrastructure and energy. These bribes granted McKinsey Africa access to confidential information, helping the firm secure lucrative consulting contracts.

In total, McKinsey Africa and its parent company earned $85 million in profits from the scheme. Vikas Sagar, a former senior partner at McKinsey, pleaded guilty to conspiracy to violate the Foreign Corrupt Practices Act (FCPA) for his role in orchestrating the misconduct.

A Financial & Ethical Reckoning

Under a three-year deferred prosecution agreement (DPA), McKinsey Africa will pay $122.85 million in penalties. Half of this amount may be credited against payments to South African authorities in related proceedings.

The settlement reflects McKinsey Africa’s cooperation during the investigation, which included disclosing evidence of misconduct, producing records from abroad, and enhancing compliance measures. These efforts resulted in a 35% reduction in the penalty under federal sentencing guidelines.

Nicole M. Argentieri, Principal Deputy Assistant Attorney General, highlighted the significance of the case, “McKinsey Africa bribed officials to secure contracts that generated tens of millions in profits. This resolution demonstrates our commitment to combating international corporate corruption.”

Compliance Reforms & Accountability

McKinsey Africa has implemented substantial compliance improvements in the wake of the scandal, including:

• Strengthening anti-corruption training across its African offices.
• Enhancing due diligence for third-party partners and public-sector clients.
• Pausing engagements with state-owned enterprises during its internal investigation.
• Voluntarily repaying over $100 million to affected South African entities.

The DOJ acknowledged these reforms as evidence of McKinsey Africa’s efforts to rebuild trust and prevent future misconduct.

The case is the DOJ’s third coordinated resolution with South African authorities in two years, highlighting the success of its International Corporate Anti-Bribery (ICAB) initiative.

FBI Assistant Director Chad Yarbrough emphasized the importance of global collaboration, “Corruption has no borders. We’ll work with our international partners to hold companies accountable wherever they operate.”

For organizations worldwide, the McKinsey Africa case underscores the importance of robust compliance frameworks. Cutting corners to win contracts can result in not only hefty fines but also significant reputational damage.

As anti-corruption enforcement intensifies, companies operating in high-risk regions must prioritize integrity and transparency—or face consequences that extend far beyond financial penalties.

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