/ 20 September 2017

McKinsey denies involvement in Gupta-linked businesses

The company has said it would co-operate with investigations into it alleged Gupta deals.
The company has said it would co-operate with investigations into it alleged Gupta deals.

Global consultancy firm McKinsey has denied any involvement in Gupta-linked business, saying the Guptas were never their clients.

McKinsey spokesperson DJ Carella told TimesLive that the company had never accepted bribes from the family, despite allegations that it subcontracted 30% of its business with Eskom to Trillian Capital Partners, a company known to be involved in the Gupta network.

“Neither the Gupta family nor any company publicly linked to the Guptas has ever been a client of McKinsey‚” Carella said

The backlash against McKinsey has intensified after KPMG last week purged its leadership in its South African headquarters following the fallout from its disastrous involvement in the state revenue services over the so-called “rogue unit”

The Democratic Alliance announced on Monday that it would open a case with the police to lay charges against McKinsey for racketeering, fraud and collusion. The charges are linked to McKinsey’s implication in corrupt activity at Eskom.

DA MP and shadow minister for public enterprises Natasha Mazzone said McKinsey must be investigated for allegations that it ignored warning signs as far back as 2013 that Eskom, Trillian, and other Gupta-linked firms had made dodgy deals.

“Criminal charges are the first step in ensuring that if any wrongdoing has taken place, those responsible can be brought to book,” Mazzone said.

A report by advocate Geoff Budlender found that when Eskom hired McKinsey to help cut wasteful expenditure and improve efficiency, the company instead turned a blind eye to Trillian’s alleged diversion of funds from the state-owned energy supplier after it subcontracted 30% of its work with Eskom to the Gupta-linked firm. 

But McKinsey has denied that there was any corruption or that it had accepted bribes.

“McKinsey never entered into a formal contract with Trillian‚ never paid or authorised payments to Trillian and was never asked to approve any payments made by Eskom to Trillian,” Carella said.

“Eskom paid McKinsey and Trillian separately. Payments made by Eskom to Trillian were presumably governed by Eskom’s rules and processes for approval of third-party payments.”

The company has said it would co-operate with investigations into alleged Gupta deals.