McKinsey To Pay South Africa Over R1bn For Its Role In State Capture -

The agreement also requires McKinsey to continue to invest in its anti-corruption programme to prevent corruption in the future

From News24

THE South Africa’s National Prosecuting Authority (NPA) has announced that it reached a landmark agreement with McKinsey South Africa, which will pay R1.1 billion for its role in state capture.

In a statement on Thursday, the NPA said that, in terms of the corporate alternative dispute resolution reached with the South African arm of United States multinational management consulting firm McKinsey & Company, McKinsey will also help the NPA’s Investigating Directorate Against Corruption by handing over “information and material” that it has in its possession.

“McKinsey will also pay an approximate amount of R1.1 billion into South Africa’s Criminal Assets Recovery Account, in recognition of the social and economic harm caused by the conduct of a former employee in South Africa,” the statement said.

The NPA said the resolution followed cooperation between the NPA and the United States Department of Justice, and the settlement was confirmed by a US Federal Court on Thursday.

As part of the agreement, the NPA says, McKinsey has admitted, accepted and acknowledged responsibility for the criminal actions and conduct of its former partner, Vikas Sagar, whose “corrupt actions” landed the company contracts with Transnet and Eskom, worth almost R2 billion.

“McKinsey has already made financial restitution to these entities by returning all fees paid to it, with interest,” the statement said.

Advocate Ouma Rabaji-Rasethaba, the head of the Asset Forfeiture Unit and Deputy National Director of Public Prosecutions, said: “This resolution is yet another significant step that takes South Africa forward in fighting crime. The NPA remains committed not only to prosecuting criminals, but also to contributing to the economic recovery of the country through restitution. Corporate alternative dispute resolutions address both of these mandates of the NPA in a cost effective, impactful way.”

The agreement also requires McKinsey to continue to invest in its anti-corruption programme to prevent corruption in the future. It also has to fulfil other anti-corruption requirements – which, if it fails to do, allows the NPA to reopen its investigation into the company’s activities in South Africa during the state capture period.

The NPA said that South Africa joins a host of countries that use alternative dispute resolution mechanisms to combat foreign bribery and corruption, including the United States, Britain, Germany, France, Brazil, Kenya, Malaysia, Singapore, Mexico and Canada.