McKinsey & Company Inc.'s African subsidiary has agreed to pay a criminal penalty exceeding $122 million to settle a U.S. Justice Department investigation into a bribery scheme involving South African government officials. The scheme, which spanned from 2012 to 2016, saw McKinsey Africa and its parent company profit $85 million through bribes to officials from South Africa's state-owned entities.
The bribes were aimed at securing contracts with South Africa's state-controlled custodian of ports, rails, and pipelines, as well as its state-controlled energy company. In response to the investigation, McKinsey Africa has entered into a deferred prosecution agreement with the Justice Department, which outlines specific terms the company must adhere to in order to avoid prosecution under the Foreign Corrupt Practices Act.
McKinsey issued a statement expressing its acceptance of the resolution and the conclusion of the situation. The company highlighted its cooperation with authorities and the significant enhancements made to its risk, legal, and compliance controls. Additionally, McKinsey noted that a former senior manager involved in the scheme had been terminated over seven years ago when the company became aware of the issues.
The company emphasized that it has undergone substantial changes since the incidents occurred, stating that McKinsey is now a fundamentally different organization. The resolution of this case underscores the importance of robust compliance measures and ethical business practices in the corporate world.
