Global consultancy McKinsey & Co essentially announced a financial mea culpa this week, agreeing to repay about R650m it received for work done for Transnet and SAA during the state capture years.
It was one of many private sector companies that benefited from dodgy contracts after working with Gupta-linked firms during the Jacob Zuma administration, which resulted in some of the country’s key state-owned enterprises being decimated through looting.
The announcement by McKinsey came less than 24 hours before it was to appear before the Zondo commission. The firm’s senior partners, Jean-Christophe Mieszala, David Robert Fine and Alexander Weiss, were going to give evidence on money flows in relation to McKinsey.
McKinsey said it had voluntarily agreed to repay the money — as if we must applaud it for this — after the commission shared evidence that its work for SAA and Transnet was marred by irregularities regarding Regiments’ role in several projects between 2012 and 2016.
Deputy chief justice Raymond Zondo welcomed the announcement and called on other companies that have been fingered in the state capture project to follow its lead and “make clear that they will not retain the proceeds of contracts that are tainted by corruption, even if that corruption was the product of processes in which they were not involved”.
This is not the first time McKinsey has reached an agreement and paid back money. In 2018 it agreed to pay back more than R900m to Eskom in relation to a contract it was awarded and in which it worked alongside Trillian Capital Partners, another Gupta-linked company.
But the firm is also not the first of these private sector companies to announce that they would return money they received through malfeasance. Bain & Co, which played a part in severely weakening the SA Revenue Service (Sars), paid R217m back to the tax collection agency for its botched restructuring of Sars. Auditing firm KPMG SA has also said it will contribute to reparations for current and former Sars employees who were purged by former commissioner Tom Moyane on the strength of the infamous “rogue unit” report authored by the company.
SA is trying to recover more money looted from the state from other controversial companies through civil claims. That some have agreed to do so is all well and good, but the question that arises is whether the offer of financial reimbursement, which is being touted as a generous, voluntary act, is really enough compensation for the damage caused to SA.
Economist Iraj Abedian made a good point on Twitter. Responding to McKinsey’s offer of repayment, he asked the firm to “stop playing games with us”. He called on McKinsey to publish the list of looting contracts and names of those involved and then openly calculate the total sum stolen, interest payable and reparation due.
Abedian rightly points out that it should not be up to these companies to decide what they should pay back. “SA team must decide amount payable. You cannot be the looter & the assessor — surely!,” he tweeted.
In the McKinsey matter, Transnet has already contradicted the company, saying there is no agreement with the firm and it has worked out that the company owes it more than R1.2bn and wants it paid back in full.
There needs to be full accountability and not what could be perceived as a PR stunt to try to clean up tainted companies’ images. These firms cannot get away with literally throwing money at the problem but never coming clean about how we landed up in this situation in the first place, and their precise role.
It is also not right that the individuals involved are allowed to resign or are removed from their positions in these companies, never to be heard from again. The companies involved seem reluctant to shed light on what happened.
Retired judge Robert Nugent, who chaired the commission into governance failures at Sars, noted in his final report that Bain had not been forthcoming with information. He made a salient point, saying full disclosure would help the SA public more than mere repayment, which could be seen as “marketing”.
We cannot just accept these reimbursements without demanding information and ensuring that those who are implicated in possible crimes face prosecution. It has become clear that there was a symbiotic relationship between these private companies, looking to score through government contracts, and the politicians who wielded influence.
The state capture commission has already heard evidence from a number of people alleging that prominent ANC leaders were given tranches of money or expensive gifts in exchange for their influence. So while we demand accountability from our politicians, at the same time we should expect the same standard from the private sector.
The only way we can truly put state capture to bed is to understand, and then dismantle, the systems that were used to fleece a nation.
• Quintal is political editor.
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