1 week Ago By Bloomberg News
(Bloomberg) — Bain & Co. is trying to repair its scarred reputation in South Africa by working for free on a private project after it was banned from doing business with the government for a decade following a corruption scandal. The consultancy has been supporting the project management office of the Energy of Council South Africa on a pro-bono basis for about the last six weeks, the head of the group said and a council document seen by Bloomberg showed.
The industry body’s members include Sasol Ltd., Anglo American Plc and the local units of Shell Plc and TotalEnergies SE. Bain was banned by the South African government in 2022 after a judicial commission tied it to illegal dealings during a restructuring of the national tax agency, where senior staff were ousted and investigative capacity was gutted.
It was one of numerous scandals in an era of government corruption in South Africa that also embroiled McKinsey & Co., SAP SE, KPMG LLP and ABB Ltd. Bain’s appointment “was quite an exhaustive process, there was some head scratching,” James Mackay, the council’s chief executive officer, said by phone on Thursday.
“They have a real intent to build public trust, which is the right thing to do.” A spokeswoman for Bain’s South African unit said the company will respond to Bloomberg’s queries later. Last week, Bloomberg reported that McKinsey is partnering with a South African business-lobby group to prepare for an event aimed at connecting global policymakers, civil-society organizations and business leaders.
It will form part of next year’s Group of 20 gatherings in the country. McKinsey last week agreed to pay more than $122 million to resolve criminal allegations tied to a corruption scandal. The impropriety involved former leaders of state-owned ports and freight rail operator Transnet SOC Ltd.
during an era of endemic government graft, known locally as state capture. McKinsey also paid back fees to the state power utility and national airline. In 2022, a month before Bain was banned from South African government business, the head of its local unit issued a public apology to the country saying it was “ashamed” of its role while denying it had committed corruption.
Ismail Momoniat, the then-acting director general of South Africa’s National Treasury, said he considered the consultancy’s actions to be “treason” and called for the blacklisting. The Treasury didn’t immediately respond to a request for comment. Work for Free In a letter to the Energy Council’s members dated Oct.
14 and seen by Bloomberg, Mackay said Bain had been chosen because it was the only consultancy of the six it engaged with that would do the work for free. The council’s board considered “any undue reputation risks,” but appointed Bain after conducting a due diligence and decided that given the steps the consultancy has taken it “should be afforded an opportunity to re-earn public trust and contribute to the South African economy,” he wrote. Bain would be excluded from the council’s direct engagement with the government and key officials had been notified, he said.
Bain is doing some work for South African companies, he added, without elaborating. The Treasury wasn’t aware of Bain’s relationship with the council, according to one of its senior officials, who spoke on condition of anonymity because a public statement hasn’t been made. Bain resigned as a member of Business Leadership South Africa, one of the country’s main business lobbies, in 2022 after coming under pressure do so.
Following last week’s reports on McKinsey’s relationship with South African business, the government said it won’t have any dealings with it regarding activities around the G-20. The Black Business Council, which represents Black-owned businesses in South Africa, called for the consultancy to be banned from doing business with both the government and local companies. Sign up here for the twice-weekly Next Africa newsletter —With assistance from Prinesha Naidoo.
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