McKinsey & Company’s African subsidiary has agreed to pay a criminal fine of more than $122 million to resolve a U.S. Justice Department investigation into a bribery scheme involving South African officials, authorities announced Thursday.
The Justice Department said the scheme, which took place between 2012 and 2016, involved paying bribes to officials at South Africa’s government, a state-controlled agency overseeing ports, railways, and pipelines, as well as the state-run energy company, in exchange for contracts. The scheme generated $85 million in profits for McKinsey Africa and its parent company, according to U.S. officials.
As part of the settlement, McKinsey Africa entered into a deferred prosecution agreement, which allows the company to avoid prosecution under the U.S. Foreign Corrupt Practices Act, provided it meets certain conditions.
In a statement, McKinsey expressed regret over the situation, saying it “welcomes the resolution of these matters and the closure of this unfortunate chapter.” The company added that it had fully cooperated with authorities and implemented “significant improvements” to its risk, legal, and compliance controls.
A former McKinsey executive involved in the case pleaded guilty to a federal charge and was fired more than seven years ago, shortly after the company became aware of the issue. McKinsey emphasized that the company is “very different today” compared to when the incidents occurred.
