Eskom, McKinsey settle over R1bn fee

McKinsey, Eskom and the Asset Forfeiture Unit (AFU) have reached a settlement regarding the controversial fee McKinsey earned from Eskom, McKinsey has said.

The settlement enables McKinsey to voluntarily return its fees for the 2016 Turnaround Programme, the management consulting firm said in a statement late on Friday afternoon.

Prosecutors had sought to recoup over R1bn in consultancy fees that they said were paid to McKinsey unlawfully.

"Eskom and McKinsey have been in discussions, along with the authorities, since the beginning of the year to ensure the fee would be repaid through an appropriate and transparent legal process," McKinsey said.

The fees would be repaid within five days of the Court order.

Saf Yeboah-Amankwah, Senior Partner at McKinsey, said: "McKinsey is thankful to have reached this milestone, which fulfils the commitment made last year to voluntarily return its full fee to Eskom. We appreciate the support of Eskom and the AFU in resolving this matter."

In June, Bloomberg reported that the AFU had filed the case against McKinsey in the North High Court in Gauteng.

At the time, the parties said they expected the matter to be settled "amicably".

McKinsey has consistently denied any wrongdoing, saying the fee repayment was as a result of Eskom not complying with procurement laws. The repayment is not an admission of liability, it said on Friday.

In December, the AFU obtained an order to freeze the money while negotiations around a settlement continued. However, negotiations reached a deadlock, and a seizure order was needed before the asset preservation order expired to ensure the money would be recovered, according to court papers.

On Friday evening, neither Eskom nor the AFU could immediately be reached for comment.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders