McKinsey & Company, Inc. was an international consulting firm, headquartered in New York, New York, that operated with offices around the world.
McKinsey and Company Africa (Pty) Ltd (“McKinsey Africa”) was a wholly owned and wholly controlled South African subsidiary of McKinsey.
Vikas Sagar, an Indian citizen and resident of the U.S. and South Africa, was a senior partner at McKinsey.
According to the documents in this case, between at least 2012 and 2016, McKinsey Africa, acting through Sagar, conspired to pay bribes to high-ranking officials at two South African state-owned enterprises: Transnet SOC Ltd., which was the custodian of ports, rails, and pipelines in the country, and Eskom Holdings SOC Ltd., South Africa’s state-owned energy company. McKinsey Africa obtained sensitive confidential and non-public information from Transnet and Eskom through local South African businesspeople regarding the award of consulting contracts. The company then used that information in proposals it submitted for multimillion-dollar consulting engagements, while knowing that South African consulting firms with which McKinsey Africa had partnered would pay a portion of their fees as bribes to officials at Transnet and Eskom. As a result of the bribery scheme, McKinsey and McKinsey Africa earned profits of approximately $85,000,000.
On December 5, 2024, the DOJ filed a single count information in the Southern District of New York against McKinsey Africa alleging a conspiracy to violate the anti-bribery provisions of the FCPA. On the same date, McKinsey and McKinsey Africa entered into a deferred prosecution agreement with the DOJ. Under the terms of the settlement, McKinsey Africa agreed to pay a fine of $122,850,000, which represented a 35 percent off the fifth percentile of the U.S. Sentencing Guidelines range, and both McKinsey and McKinsey Africa agreed to report to the DOJ on the status of the companies' anticorruption compliance for a term of three years. The DOJ agreed to credit up to $61,425,000 of the fine for what the company will pay South African authorities for violations of South African law related to the same conduct alleged in the information. The DOJ noted both McKinsey and McKinsey Africa's cooperation and remediation.
In a related proceeding initiated on December 16, 2022, the DOJ filed a single count information under seal in the Southern District of New York against Sagar alleging a conspiracy to violate the anti-bribery provisions of the FCPA. On December 5, 2024, Sagar entered into a plea agreement with the DOJ. However, the plea remains under seal, so its precise details are unknown at this time. The stated sentencing date in the docket appears to be an error, so it is also unknown when Sagar is scheduled to be sentenced.
