McKinsey caught up in SA scandal

25 dead in C. Africa

JOHANNESBURG, Sept 13, (Agencies): Global consultancy McKinsey, facing parliamentary hearings in South Africa over payments to a firm controlled by a billionaire family, ignored suspicions raised over several years by local senior staff that companies it worked with were set up to steer state contracts, two former employees said.

Since July, when new information emerged about McKinsey’s flagship South African contract, the consultancy has been under increasing scrutiny in a widening corruption scandal over the influence of the Gupta family, businessman friends of President Jacob Zuma.

South Africa’s parliamentary committee on public enterprises is investigating whether McKinsey knowingly let funds from state utility Eskom be diverted to a Gupta company as a way of securing a $78 million contract to advise Eskom. McKinsey denies wrongdoing and says it intends to cooperate with the authorities if evidence of any impropriety emerges.

“We hold ourselves to the highest professional standards wherever we work and stand firmly against corruption. We are committed to ascertaining the facts and swiftly taking any and all appropriate action,” spokesman Steve John told Reuters.

McKinsey has hired law firm Norton Rose Fullbright to assist in an internal investigation. Norton Rose said it would not comment while its probe is under way.

The accounts by the two former employees, who spoke to Reuters separately on condition of anonymity because their present jobs do not permit them to speak to the media, could provide fodder for lawmakers who say they have questions about the timeline McKinsey has given of when it learned of potential problems.

McKinsey says it carried out a due diligence review on its partner in the Eskom deal beginning in January 2016, and cut all ties with the local firm two months later after it concluded the company was unfit.

“We carry out checks on suppliers and partners when we work with them and address issues and concerns when they arise. When concerns were raised we undertook due diligence,” spokesman John said in a written response to questions.

But the ex-employees said they had attended meetings in Johannesburg where problems with that firm and a precursor company employing the same principal staff had been discussed much earlier: as far back as 2013.

Zuma

C. Africa clash kills 25:

At least 25 people in the Central African Republic have been killed in recent sectarian clashes between armed groups, while a new wave of thousands have been made homeless by the violence, the UN said Tuesday.

In the central city of Bria, preliminary estimates indicate “at least 10 bodies and about 50 wounded” after fighting between two rival factions of an armed group on Sept 7 and 8, the UN Office for the Coordination of Humanitarian Affairs (OCHA) said in its weekly report, received by AFP.

CAR defense min sacked:

Central African Republic president FaustinArchange Touadera sacked his defense minister on Tuesday evening, according to a state radio broadcast, amid growing violence that threatens to spin the country out of control.

The dismissal of Levy Yakete, who was blacklisted by a United Nations Security Council committee in 2014 for his role in a bloody 2013 civil war, was part of a wider Cabinet reshuffle. The statement did not say if his dismissal was related directly to growing violence.

Kenya opposition in boycott:

Kenya’s opposition boycotted the opening session of parliament on Tuesday after the Supreme Court cancelled the result of last month’s presidential election and ordered a fresh vote.

President Uhuru Kenyatta — who had his victory in the Aug 8 poll annulled on Sept 1 — led proceedings, while opposition lawmakers made good on a promise to boycott the ceremony.

Supreme Court judges normally attend the opening of parliament but also stayed away.

Violence erupts in Haiti:

Protesters brought parts of the Haitian capital Port-au-Prince to a standstill Tuesday, setting vehicles alight and damaging local businesses in violent demonstrations against the government’s budget plans.

“These little thieves in Parliament voted for this budget to help the government exploit the people,” said protester Marco Paul Delva, standing by a barricade of flaming tires near the legislature.