A branch of the consulting firm McKinsey & Company based in Africa will pay over $122 million in criminal penalties to settle an investigation by the U.S. Department of Justice concerning a lengthy scheme involving bribery of South African government officials, authorities announced on Thursday.
The bribery activities targeted officials at key state-owned entities in South Africa, including those overseeing ports, railways, and pipelines, as well as the energy sector. The Justice Department indicated that through these illicit dealings, McKinsey Africa, alongside its parent corporation, accrued approximately $85 million in profits from 2012 to 2016.
As part of the resolution, the Justice Department has established a deferred prosecution agreement with McKinsey Africa. This arrangement allows the company to avoid criminal charges under the Foreign Corrupt Practices Act, provided that it adheres to specific conditions set forth by the authorities.
In a statement, McKinsey expressed its acceptance of the resolution and the conclusion of this unfortunate situation. The firm emphasized its collaboration with investigators and noted that it has implemented significant improvements to its risk management, legal, and compliance frameworks.
Additionally, a former senior manager at McKinsey, who has admitted guilt to a federal charge related to the scandal, was terminated more than seven years ago, shortly after the firm became aware of the related issues. The company asserted that it has undergone substantial changes since these events transpired.
“McKinsey is a very different firm today than when these matters first took place,” the statement concluded, highlighting the firm’s commitment to reform and compliance.
