The National Prosecuting Authority (NPA) announced that it has successfully concluded dispute resolution with McKinsey South Africa, in which McKinsey will pay about R1.1-billion into South Africa's Criminal Assets Recovery Account, owing to the social and economic harm caused by one of its former employees.

McKinsey will also have to assist the Investigating Directorate in its criminal investigations by continuing to hand over any relevant information and materials in its possession.

This resolution follows international cooperation between the NPA and the US Department of Justice (US DOJ), coordinated with US criminal justice processes, which the NPA said had resulted in a settlement agreement confirmed today by a US Federal Court.

“In terms of the Resolution, McKinsey admits, accepts and acknowledges responsibility under South African law for the criminal actions and conduct of Vikas Sagar, who was a former partner of McKinsey, during the relevant period. As a result of Sagar's corrupt actions, McKinsey was awarded contracts with Transnet and Eskom amounting to nearly R2-billion,” explained NPA spokesperson Mthunzi Mhaga.

McKinsey has already returned all fees to Transnet and Eskom, with interest.

The NPA's Asset Forfeiture Unit (AFU) has played a key role in facilitating the finalisation of the resolution, with AFU head Deputy National Director of Public Prosecutions Ouma Rabaji-Rasethaba saying this was yet another significant step that took South Africa forward in fighting crime.

“The NPA remains committed not only to prosecuting criminals but also to contributing to the economic recovery of the country through restitution. Corporate alternative dispute resolutions address both mandates of the NPA in a cost-effective impactful way. Such resolutions are a globally recognised and proven crime-fighting method. This strategy is to be embraced as South Africa recovers from the effects of State capture,” said Rabaji-Rasethaba.

The resolution also obliges McKinsey to continue investing in its extensive local and international corporate compliance anti-corruption programme to prevent and detect future corrupt practices.

Mhaga highlighted that the programme was modelled on the US DOJ's compliance requirements that include adoption of risk-based controls and data analytics, investing more resources in compliance, and foregrounding compliance in internal assessment-based training, messaging, and company policies.

A dedicated senior compliance official is required to report to the board on compliance matters, and holds significant independence, he added.

Further, the resolution permits the NPA to reopen its investigation concerning McKinsey should it fail to implement the programme, fail to provide the necessary cooperation with the ongoing South African investigations into the relevant conduct referred to in the resolution, or in the event that it provides materially false, incomplete or misleading information to the NPA.