McKinsey Africa's $122 Million Penalty: A Case of Corruption and Compliance

McKinsey's African subsidiary agreed to pay over $122 million to settle a U.S. Justice Department probe into bribery involving South African officials. The bribes facilitated contracts for state-controlled entities, netting McKinsey $85 million in profits. A deferred prosecution agreement has been reached, with McKinsey enhancing compliance measures.

In a landmark settlement, McKinsey & Company's African subsidiary has agreed to pay a criminal penalty of over $122 million to the U.S. Justice Department. The case pertains to a scheme involving the bribery of South African government officials.

The Justice Department disclosed details of the bribery plot, which aimed to secure contracts with South Africa's state-owned entities managing ports, railroads, and energy. The operation reportedly earned McKinsey Africa and its parent company $85 million in profits from 2012 to 2016.

Having reached a deferred prosecution agreement, McKinsey Africa will avert legal prosecution under the Foreign Corrupt Practices Act by adhering to specified conditions. The company asserts that significant compliance enhancements have been made, emphasizing its transformation from the period when these actions occurred.

(With inputs from agencies.)