South African officials will receive $123 million in settlement from McKinsey unit for bribery allegations.

• Nearly $123 million will be paid by a McKinsey & Company subsidiary to settle an investigation into a bribery scheme targeting South African government officials, according to the U.S. Department of Justice.
• The bribery scheme resulted in McKinsey and McKinsey Africa earning approximately $85 million in profits, according to the DOJ.
• A guilty plea by Vikas Sagar, a former senior partner at McKinsey, was unsealed by prosecutors, who revealed that he worked in the subsidiary's South African office and participated in a yearslong bribery scheme.

Nearly $123 million will be paid by a subsidiary of McKinsey & Company to settle allegations that they bribed government officials in South Africa, according to the U.S. Department of Justice.

A 2022 guilty plea by Vikas Sagar, a former senior partner at McKinsey who worked in the subsidiary's South Africa office, was also unsealed by federal prosecutors.

In U.S. District Court for the Southern District of New York, Sagar, a 56-year-old resident of Johannesburg, admitted to one count of conspiring to violate the Foreign Corrupt Practices Act.

Between 2012 and 2016, McKinsey Africa paid bribes to officials at two South African state-controlled utility companies in order to secure consulting contracts, according to the DOJ's press release.

The two companies, Transnet SOC Ltd. and Eskom Holdings SOC Ltd., had their confidential information obtained by McKinsey Africa during the bidding process, according to prosecutors.

The DOJ stated that the company submitted multimillion-dollar consulting engagement proposals, knowing that officials from Transnet and Eskom would pay part of their fees as bribes to South African consulting firms with which it had partnered.

Prosecutors claim that McKinsey and McKinsey Africa made around $85 million in profits through a bribery scheme.

McKinsey Africa has reached a three-year deferred prosecution agreement with the DOJ over a criminal charging document, an information, accusing the company of conspiring to violate the anti-bribery provisions of the FCPA, prosecutors announced.

The deferred prosecution agreement requires McKinsey Africa to accept responsibility for the allegations.

The FBI Criminal Investigative Division's assistant director, Chad Yarbrough, stated in a press release that McKinsey Africa was involved in a significant and ongoing bribery scheme to obtain contracts through corrupting government officials.

Yarbough stated that this behavior is a clear violation of law and a breach of public trust, regardless of where the crime takes place. The FBI will always collaborate with international partners to expose corruption.

McKinsey Africa expressed its welcome for the resolution of these issues and the conclusion of this unfortunate circumstance, as stated in a Thursday release.

"Since the initial occurrence of these issues, McKinsey has undergone significant changes and has taken immediate action. We promptly terminated Mr. Sagar, refunded our fees with interest, collaborated with the authorities, and implemented substantial enhancements to our risk, legal, and compliance protocols to establish ourselves as a benchmark in our industry."