After Settlement Over Opioids, Top Global Consulting Firm McKinsey Settles Bribery Case In South Africa
Global consulting powerhouse McKinsey & Company is facing renewed scrutiny after reaching a $122 million settlement over a bribery case in South Africa. The deal follows closely on the heels of McKinsey’s $650 million settlement in the United States for its role in the opioid crisis, underscoring the firm’s increasing entanglement in high-profile scandals worldwide.
McKinsey, one of “Big Three” management consultancies, along with Boston Consulting Group and Bain & Company, generated $16 billion in revenue in 2023.
The South African bribery settlement resolves allegations that McKinsey colluded with government officials to secure lucrative consulting contracts with two state-owned companies—Eskom, the country’s primary energy provider, and Transnet, the national freight rail operator. Between 2012 and 2016, during Jacob Zuma‘s presidency, these contracts were part of what is known locally as “state capture,” a systemic abuse of public resources that nearly collapsed both companies, The Financial Times reported.
Under the agreement, McKinsey will pay $122 million, split between U.S. and South African authorities. However, critics argue that the settlement is far from sufficient given the scale of the damage. Glynnis Breytenbach, a South African Member of Parliament, called the payment a “token gesture,” emphasizing the long-term harm inflicted on South Africa’s state institutions and citizens. “It will take 20 years to repair the damage done by McKinsey to South Africa,” Breytenbach told The Financial Times, adding that the fine does little to deter future corruption.
McKinsey’s involvement in the scandal was facilitated by Vikas Sagar, a former South African partner, who pleaded guilty in 2022 to violating the U.S. Foreign Corrupt Practices Act. Despite Sagar’s conviction, South African politicians and activists argue that McKinsey’s top executives should also face criminal charges.
In 2021, the firm agreed to pay $573 million to settle allegations that it had “turbocharged” opioid sales for Purdue Pharma, contributing to the devastating opioid epidemic in the U.S. That settlement included provisions for court-ordered reforms, including retaining emails for five years and disclosing conflicts of interest when bidding for state contracts.
While McKinsey has publicly expressed regret over both cases, the firm maintains that its past actions were lawful. In South Africa, McKinsey claimed to have terminated Sagar’s employment seven years ago and returned $227 million in fees and interest to affected state-owned entities. However, this figure is less than half the $500 million it originally stood to earn from one of its Eskom contracts.
