McK­in­sey ig­nored staff warn­ings in S. Africa scan­dal, ex-em­ploy­ees say

The Star Malaysia - StarBiz - - Foreign News -

JO­HAN­NES­BURG: 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 US$78mil 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.

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