Subsidiary of US consulting firm pays $122 million to resolve South Africa bribery case involving Indian ex-executive
A subsidiary of global consulting company McKinsey has agreed to a $122.85 million settlement with US prosecutors in a South African bribery case involving a former Indian executive, officials said.
“McKinsey Africa has agreed to pay a criminal penalty of more than $122 million” to resolve a case involving bribery of South African officials to secure lucrative consulting contracts that generated tens of millions of dollars in profits, said Principal Deputy Assistant Attorney General Nicole M. Argentieri on Thursday.
The Department of Justice (DOJ) stated that between 2012 and 2016, McKinsey’s subsidiary, through its senior partner Vikas Sagar, paid bribes to former officials of state-owned South African companies to obtain confidential information, which led to $85 million in profits.
Sagar, 56, had previously pleaded guilty to participating in a conspiracy to violate the Foreign Corrupt Practices Act in a case before the federal court in the Southern District of New York.
Federal prosecutor Damian Williams said in court documents that Sagar would forfeit all property linked to the bribery scheme.
Court papers identified Sagar as an Indian citizen with a green card who was living in South Africa.
The DOJ also noted that McKinsey received “credit for its cooperation with the Department’s investigation,” including turning over documents, financial records, and emails, as well as reporting Sagar’s attempts to delete evidence.
McKinsey and its subsidiary voluntarily repaid South African state-owned enterprises for “revenues received from potentially tainted contracts” due to the bribery.
Court documents revealed that through bribery, McKinsey Africa obtained sensitive information about consulting contracts from government enterprises such as the transportation and pipelines company Transnet and the energy company Eskom. With this information, McKinsey submitted proposals for multimillion-dollar contracts, knowing that South African consulting firms McKinsey Africa had partnered with would pay a portion of their fees as bribes to officials at Transnet and Eskom.
According to Sagar’s LinkedIn profile, he studied at The Lawrence School in Sanawar, Himachal Pradesh, and received his Bachelor’s degree from the University of Michigan and an MBA from the Wharton School of the University of Pennsylvania. He left McKinsey in 2017 after a 16-year tenure.
