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South African politicians and activists have strongly criticized a $122 million deal with consulting firm McKinsey to settle a bribery scandal, arguing that tougher action is needed to combat widespread corruption in the country.
The agreement, reached between McKinsey and US and South African authorities, comes after revelations that the firm had paid bribes to officials at state-owned companies Eskom and Transnet between 2012 and 2016 in exchange for lucrative consulting contracts. Both companies faced near-collapse due to the abuse of public contracts, a practice known as “state capture,” during the presidency of Jacob Zuma.
Glynnis Breytenbach, a member of South Africa’s parliament and justice spokesperson for the Democratic Alliance, criticized the settlement as a mere “token” gesture. She emphasized that the damage caused by McKinsey’s actions would take years to repair and that the firm should not be allowed to evade criminal consequences by simply paying a fine.
The US Department of Justice utilized a guilty plea from former McKinsey partner Vikas Sagar, who admitted to violating the Foreign Corrupt Practices Act, to build its case against the firm. Breytenbach called for Sagar and other McKinsey executives involved to be extradited to South Africa to face criminal charges.
McKinsey defended the settlement as a means to bring closure to the situation, stating that it had terminated Sagar’s employment when his misconduct came to light. The firm disclosed that it had paid R4.1 billion ($227 million) to settle the matter, including returning fees and interest to the affected companies.
However, critics like UK House of Lords member Peter Hain, a prominent anti-apartheid activist, believe that global consulting firms like McKinsey must be held accountable for their role in perpetuating corruption. Hain called for governments to ban these firms from public sector work until they demonstrate ethical conduct.
Despite the settlement, corruption allegations in South Africa persist, with trials pending for individuals linked to the McKinsey scandal. The National Prosecuting Authority commended the settlement as a significant step in combating crime and stated that McKinsey would continue to cooperate in ongoing investigations.
Non-profit organization Open Secrets raised concerns that the settlement unfairly scapegoated Sagar, failing to address the systemic issues within McKinsey. The group urged for a more comprehensive approach to holding the firm accountable for its actions.
In conclusion, the McKinsey bribery scandal serves as a stark reminder of the challenges posed by corruption in South Africa. While the settlement may provide some closure, it is essential for authorities to pursue further accountability and transparency to combat endemic corruption effectively.
