By John Ikani
McKinsey & Company’s African division has agreed to pay over $122 million in criminal fines to settle a U.S. Justice Department investigation into a bribery scheme involving South African officials.
According to U.S. authorities, the scheme included illicit payments to officials in the South African government, a state agency overseeing transport infrastructure, and the national energy provider. These bribes secured contracts that reportedly earned McKinsey Africa and its parent company $85 million in profits between 2012 and 2016.
The Justice Department has entered into a deferred prosecution agreement with the company. Under the terms, McKinsey Africa can avoid prosecution for violating the Foreign Corrupt Practices Act if it adheres to specific conditions.
In a statement, McKinsey acknowledged the settlement, calling it a step toward resolving “these matters” and closing “this unfortunate situation.” The firm said it had cooperated fully with investigators and implemented significant reforms to its risk management and compliance systems.
The company also disclosed that a former executive involved in the misconduct was dismissed over seven years ago when the issues first came to light.
“McKinsey is a very different company today than it was when these events occurred,” the statement read.
