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Transparency is essential in building public trust, especially given the widespread erosion of confidence in institutions during the state capture era. – Public Interest SA

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Sizwe sama Yende

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The National Prosecuting Authority’s (NPA) agreement with a multinational consultancy to pay back R1.1 billion in state capture benefits might be landmark but the authority must disclose its full details.

This is according to non-profit organisation, Public Interest SA, which also feels that McKinsey South Africa’s former partner, Vikas Sagar, must personally account for his actions in dealing with state-owned enterprises.

“Transparency is essential in building public trust, especially given the widespread erosion of confidence in institutions during the state capture era,” Public SA said in a statement.

McKinsey SA was one of consulting companies that overcharged state-owned enterprises such as Eskom and Transnet for useless expertise, and its officials offered bribes to score lucrative contracts.

In 2018, McKinsey’s head, Kevin Sneader, personally came to South Africa to apologise in the wake of the scandal spearheaded by Sagar. Despite its ‘work,’ McKinsey still left Eskom cash strapped and failing to deal with loadshedding.

The consultancy struck a deal with the NPA last week to pay the amount into South Africa's Criminal Assets Recovery Account for enabling state capture.

Public Interest SA said that it commended the NPA for leveraging alternative dispute resolution mechanisms and for working with the United States Department of Justice to secure this outcome.

 

The organisation also acknowledged McKinsey's stated commitment to cooperate with authorities, invest in anti-corruption measures, and improve compliance controls.

“However, as advocates for justice and transparency, we urge the NPA to disclose the full details of this agreement.”

 

Public Interest SA called on the NPA to ensure that Sagar faced criminal prosecution for his corrupt actions. “It is unacceptable that senior executives in multinational consulting firms such as McKinsey, Bain & Company, and SAP often evade accountability, leaving others to bear the brunt of justice,” said the organisation.

Furthermore, Public Interest SA said that the NPA’s mandate must go beyond financial recovery and pursue criminal charges against all individuals who enabled state capture.

 

The US Department of Justice said that according to court documents and admissions, Mckinsey Africa agreed to pay bribes to then-officials at Transnet and at Eskom.

 

The department said that between at least 2012 and 2016, McKinsey Africa obtained sensitive confidential and non-public information from Transnet and Eskom regarding the award of lucrative consulting contracts and submitted proposals for multimillion-dollar consulting engagements, while knowing that South African consulting firms with which McKinsey Africa had partnered would pay a portion of their fees as bribes to officials at Transnet and Eskom.

“As a result of the bribery scheme, McKinsey and McKinsey Africa earned profits of approximately $85,000,000 (R1.5 billion).