McKinsey Africa agrees to $122 million fine for South African bribery scandal

An African subsidiary of consulting firm McKinsey & Company Inc. will pay a $122 million fine to resolve a U.S. Justice Department investigation into a years-long bribery scheme involving South African government officials and state-controlled agencies.

The scheme, which ran from 2012 to 2016, involved bribes paid to officials at entities overseeing ports, railways, pipelines, and energy. These actions secured contracts that generated $85 million in profits for McKinsey Africa and its parent company, U.S. authorities disclosed on Thursday.

McKinsey has entered into a deferred prosecution agreement, avoiding prosecution under the Foreign Corrupt Practices Act if it adheres to specified conditions. The company stated it has made significant improvements to its compliance controls and emphasized its cooperation with the investigation.

A former McKinsey executive implicated in the case pleaded guilty to a federal charge and was dismissed from the company over seven years ago. McKinsey expressed relief at the resolution, describing itself as a reformed organization compared to the time of the offenses.