Calls for McKinsey to be charged penalty over Eskom saga
The company, together with Trillian, was contracted to affect a turnaround strategy at the power utility with McKinsey receiving R1 billion.
JOHANNESBURG – While global consultancy firm McKinsey has paid back the money it received unlawfully from Eskom, there are calls for the company to be charged a penalty.
The firm on Monday apologised for its role in state capture and paid back more than R900 million to Eskom.
The company, together with Trillian, was contracted to affect a turnaround strategy at the power utility with McKinsey receiving R1 billion while Trillian pocketed R600 million.
Economist Iraj Abedian says while it's a good start to admitting wrongdoing, the company must still face the music.
“National Treasury as the custodian on Eskom and as a client have to now engage McKinsey and say you’ve paid back what you’ve stolen, now what’s the penalty? The most important thing is that McKinsey has contributed materially to the state of South Africa’s credit rating.”
Meanwhile, Eskom says it’s relieved that McKinsey has finally paid back the money, saying it will now turn its attention on Trillian Capital.
Eskom spokesperson Khulu Phasiwe says they are just happy the money has been paid back.
“They’ve been this standoff for many years, we’re glad now that the matter has reached finality.”
Phasiwe adds that: “The Asset Forfeiture Unit has taken a legal view on this [involving Trillian] matter because ultimately we want to have that money back.”
He says Eskom will make sure it doesn’t entangle itself in such unlawful contracts again.
Meanwhile, McKinsey has admitted that it failed to follow its own procedures, including its failure to do more due diligence on Gupta-linked companies Trillian and Regiments.
The company’s global managing partner Kevin Sneader was speaking at the Gordon Institute of Business Science on Monday.
“We did not admit where we were wrong. And worse, we did not say sorry quickly enough and clearly enough.”
He said the company should have communicated well enough to show how serious it was taking the issue of state capture and how sorry it was for its involvement.
The company said its mistakes had a significant material effect on its business.
(Edited by Leeto M Khoza)