confidentially speaking
The Africa Confidential Blog
Holding companies to account
Blue Lines
The list of international companies getting snarled in battles about
fraud and politics in Africa has lengthened this year to include
hitherto more pristine names, such as McKinsey, KPMG and Germany's SAP
software company. They have all been named in the widening probes into
the Gupta family's relations with South
Africa's President Jacob Zuma.
Remarkably, the companies continued to work on Gupta-linked
projects long after the family started attracting intense scrutiny from
the media. At a minimum, the companies will have to review their due
diligence procedures which seem, in many cases, elaborate box-ticking
exercise. All three risk reputational damage, most seriously for
McKinseys, which advises companies and governments on how to avoid such
problems.
Other companies such as Credit Suisse and Russia's state bank VTB
are in denial about corporate failings, such as their role in
structuring the notorious tuna bond deals as part of a package of some
US$2 billion of secret loans that nearly bankrupted Mozambique.
So what are the prospects of tougher government measures to hold
companies to account in Africa and elsewhere? Not high, according to
Hui Chen, who has resigned from
a top fraud-busting post in the Department of Justice in Washington. She was going, she said, partly
because of the 'cognitive dissonance' of 'trying to hold companies to
standards that our current administration is not living up to'.
