In a press release, South African state utility Eskom has said it welcomes the apology made by McKinsey & Company global managing partner, Kevin Sneader to the people of South Africa yesterday.
McKinsey has made sweeping changes to its South Africa business to try to rebuild its reputation following a deal with friends of former South African president, Jacob Zuma.
Sneader, who is newly appointed as McKinsey’s global managing partner, announced that the firm has appointed a new head of its Africa division and replaced its South African finance, legal and compliance staff.
“On behalf of McKinsey & Company, I sincerely apologise to the people of South Africa. We are deeply sorry,” Sneader said.
“I hope you will allow us to earn back the trust we have lost.”
McKinsey partnered with local consultancy Trillian in order to win a R1.6 billion ($120 million) contract with state power utility Eskom in 2016. Trillian was controlled by the Guptas, who are the focus of corruption and state capture investigations involving hundreds of millions of dollars.
Sneader admitted: “To be brutally honest – we were too distant to understand the growing anger in South Africa.”
McKinsey had previously defended its work at Eskom and its fees but Sneader said that position had changed.
“It is hard to be proud of our work on the turnaround program given where Eskom is,” Sneader told Reuters.”
“The fee was too large.”
Eskom Group chief executive Phakamani Hadebe says: “We would like to thank the Asset Forfeiture Unit (AFU), NDPP and McKinsey for their cooperation and confirm that we have received the payment of R902m. This payment goes a long way towards our quest to address the issues of funds lost and regaining the trust of our people. We commit ourselves to root out financial mismanagement and malfeasance and we will continue to work with the six regulatory bodies and law enforcement agencies in addressing corruption, which are the National Treasury, Special Investigative Unit (SIU), SAPS, Hawks, NDPP and the Zondo Commission.”