The move appears to be the first major response by prosecutors to corruption allegations involving the Gupta family, who have been accused of using their close relationship to President Jacob Zuma to get government contracts and steal public funds. Revelations related to corruption exposed by the #GuptaLeaks have rocked the country as part of South Africa’s largest post-apartheid scandal.
Allegations against McKinsey, a global management consultancy firm, have already raised the ire of corporations such as Coca-Cola, which announced that its South Africa branch would not hire McKinsey for consulting in the future.
The South African National Prosecution Authority (NPA) stated that it first ordered its Asset Forfeiture Unit to freeze McKinsey and Trillian assets on December 14.
The Associated Press said on Wednesday that South African media outlets reported a recently-filed affidavit detailing the allegations against McKinsey and Trillian. The most serious allegation remains the $130 million in illegal payments to the two companies made by Eskom, the South African energy utility. A separate accusation made by the South African Companies and Intellectual Property Commission (CIPC) hinges on a letter from McKinsey to Eskom that appeared to treat Trillian, the company with Gupta ties, as its formal subcontractor before Eskom had approved such a step. According to The Financial Times, McKinsey disavowed the letter when it emerged last year.
The two companies—McKinsey and Trillian—will have 90 days to show that their contracts with various state-owned entities were lawfully awarded.
McKinsey previously said it committed “errors of judgment and process” in its dealings with Eskom. On Wednesday it said it plans to return the money it received in consulting fees and that it was not involved in bribery or other corruption.
According to Reuters, parliament is investigating whether McKinsey knowingly let funds from Eskom be diverted to Trillian and the Gupta family as a way of securing the contract.
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 Gupta brothers.
McKinsey and Trillian are not the only companies under investigation. The NPA’s Asset Forfeiture Unit is currently pursuing 17 other cases targeting illegally obtained assets worth more than $4 billion. So far little is known about the other investigations.
