Bain hit with UK state contracts ban over 'grave misconduct' in South Africa

Three-year moratorium imposed after global consultancy 'colluded' with former South African president Jacob Zuma to destabilise country's public institutions

Jacob Zuma during his corruption trial in Pietermaritzburg, South Africa. Reuters
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Boston consultancy Bain & Co has been barred from tendering for UK government contracts for three years for its role in a corruption scandal in South Africa that resulted in its former leader, Jacob Zuma, being jailed for 15 months in June 2021 over his failure to testify.

The ban will be applied retrospectively from the beginning of this year and was doled out by British Cabinet Office Minister Jacob Rees-Mogg, making the UK the first country to penalise Bain, and pressure is now on the US to do likewise.

Informing Bain's UK managing partner James Hadley of his decision in a letter seen by the Financial Times, Mr Rees-Mogg told him the company's integrity had been brought into question after it was found guilty earlier this year of undermining South Africa's revenue service through advisory work carried out at the behest of then president Zuma.

“I trust that after three years have elapsed Bain & Co will have restored its reputation,” wrote Mr Rees-Mogg, who also suggested the company appeared insufficiently penitent for the part it had played in the destabilisation of the South African economy in return for lucrative government contracts.

The ban was welcomed by veteran anti-apartheid campaigner Lord Peter Hain.

“I’m very pleased. This sets down a marker for all companies which behave in an unlawful, unethical and unprofessional way that they won’t be able to tender for government contracts," he said.

“I commend Jacob Rees-Mogg for doing this and I want the US government to do the same thing."

While Bain is not a major contractor for the UK government, it has still received business worth up to £63 million ($76.7m) since 2018. But it is the company's prestige, not pockets, that has been dealt the biggest blow.

“We were disappointed and surprised by the minister’s decision ... we will be responding to express our concern about the process and its outcome and to address inaccuracies in his letter," Bain said in a statement.

“If necessary, we will then consider other options for review of the decision. In the meantime, we will continue to work with the Cabinet Office to ensure that we do what is required to restore our standing with the UK government.”

This is not the first time a global consultancy has been punished for criminal behaviour in South Africa. Others include Mckinsey, KPMG, Deloitte and Bell Pottinger, the latter found guilty in 2017 of inflaming racial tensions in the country to benefit the agenda of the billionaire Gupta brothers.

Updated: August 03, 2022, 11:02 AM