Bain & Company whistle-blower, Athol Williams, has said that South Africa needed a comprehensive, non-legal approach to dealing with all companies and individuals involved in State Capture, in addition to legal action though it appears unlikely, so the country could achieve some semblance of justice and move on.
“Being haphazard does not serve our pursuit of justice and causes damaging uncertainty in our economy,” Williams told Business Report by email yesterday.
This was in response to the Presidency criticizing the black sheep of State Capture, McKinsey and Bain’s involvement in national projects.
Bain & Co is trying to repair its 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.
Last week, Bloomberg reported that McKinsey was partnering with a South African business-lobby group to prepare for an event aimed at connecting global policymakers, civil-society organisations and business leaders. It will form part of next year’s Group of Twenty (G20) gatherings in the country.
In a statement on Sunday, the Presidency said it had “noted with concern” the recent appointments of McKinsey as a supporting partner to the B20, the business engagement group that meets on the sidelines of the G20 and coordinates the participation of business in the G20, and Bain to the Project Management Office of the Energy Council of South Africa.
“Whilst the Presidency or government has no control over the B20 processes, it does not endorse the appointment of McKinsey in this regard. Similarly, the Presidency does not condone the inclusion of Bain in supporting the activities of National Energy Crisis Committee,” said Vincent Magwenya, spokesperson for the Presidency.
“The appointments do not contribute to the engendering of public trust and promotion of good governance, given the well documented role of the two firms in state capture and corruption.”
The Presidency called on business to reconsider its position and to appoint more suitable partners for these important endeavours.
Williams said State Capture was an assault on the country’s democracy, so it was right that the President enters the fray.
“What concerns me is the haphazard and inconsistent way we are dealing with companies and individuals involved where some are fined, banned or publicly shamed while others are not,” Williams said.
“We must decide what we want from these companies and then hold them to this requirement, rather than jump up and down every time they do something or we learn something new.”
Business Unity South Africa (BUSA), in tandem with Business Leadership South Africa (BLSA), said they would not comment until meeting with President Cyril Ramaphosa to discuss the matter.
A Bain spokesperson declined to comment.
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.
McKinsey paid more than $122 million (more than R2 billion) to resolve criminal allegations tied to bribery allegations involving former leaders of State-owned ports and freight rail operator, Transnet.
Daniel Silke, director of the Political Futures Consultancy, yesterday said this might be a moralistic outburst from the President on this issue given the history of Bain and McKinsey in South Africa.
Silke said that from a business perspective, it will be seen simply as the President playing his role in serving rhetoric, giving question marks about these companies and that the intrinsic value they bring to business aspects will largely be up to the business sector to assess.
“These are large global consultancies that continue to operate across the world and they are fully therefore involved in the cutting edge of research and of updating consultancy practices and therefore they continue to have use, at least theoretically. For the President now to suggest staying away from them, I don't think really will have an impact on the business community themselves,” Silke said.
“I think that scepticism for international consultancy has become fashionable in certain political quarters all across the world and therefore, I think the President is ultimately expressing the scepticism for the role of consultants. Of course, the government themselves use consultants and therefore it perhaps somewhat contradictory to point business in this direction when governments themselves use different consultants.”
BUSINESS REPORT