Court freezes McKinsey assets

The High Court in Pretoria has authorised the freezing of R1.6 billion in assets earned by consultancy McKinsey and a firm linked to the Gupta family, a source at the state prosecutors’ office said.

The court made the decision in December after a request by the National Prosecuting Authority (NPA) to freeze the fees earned by McKinsey and local consultancy Trillian for advising Eskom.

Privately-held McKinsey, one of the world’s largest management consultancies, has already lost several clients over the contract.

This month President Jacob Zuma agreed to set up a commission of inquiry into allegations of influence peddling by the Gupta brothers, who controlled the firm McKinsey partnered with on the R1.6 billion contract to advise Eskom in 2016.

Separately, parliament is investigating whether McKinsey knowingly let funds from Eskom be diverted to Trillian as a way of securing the contract.

“On December 14, 2017, the NPA obtained a preservation order from the High Court in Pretoria to preserve assets worth around R1.6 billion relating to Trillian and McKinsey,” said the NPA source, who declined to be identified.

The order allows prosecutors to freeze assets pending the outcome of an investigation.

A spokesperson for McKinsey said on Monday it had not received formal communication about the preservation order.

“As we have said before … we will return the fee we earned from the Eskom turnaround programme (R1.028 billion) no matter what,” the spokesperson said.

McKinsey will cooperate with SA authorities in their investigations into the case, he added.

McKinsey launched its own investigation into its handling of the partnership with Trillian and says it ceased work with the firm in March 2016 after due diligence showed links to the Guptas.

When contacted in November, Trillian denied wrongdoing relating to the Eskom contract.

Both Zuma and the Guptas deny wrongdoing.

The court decision is one of the first instances in which authorities have acted on allegations of wrongdoing by three Gupta brothers – Ajay, Atul and Rajesh – who SA’s anti-corruption watchdog accuses of siphoning off public funds.

New ANC president Cyril Ramaphosa said the judicial inquiry which Zuma agreed to set up should be given top priority.

As we have said before … we will return the fee we earned from the Eskom turnaround programme. McKinsey spokesperson