US consulting firm Bain & Co has been banned from competing for UK government contracts, after a review by the Cabinet Office determined the Boston consultancy “guilty of grave professional misconduct” over its role in alleged “state capture and corruption by the South African government”.
As first reported by the Financial Times, Cabinet Minister Jacob Rees-Mogg wrote a letter to Bain & Co informing the US firm of the three-year ban.
Rees Mogg’s letter came after the Cabinet Minister carried out a review of the South African Government Commission’s evidence and conclusions around the part Bain allegedly played in the scandal that saw former South African president Jacob Zuma and his associates “capture” the South African government’s Revenue Service.
“I trust that after three years have elapsed Bain & Co will have restored its reputation,” Rees-Mogg reportedly said in a letter to Bain UK’s managing partner James Hadley.
A Cabinet Office spokesperson confirmed to City A.M. that Bain & Co will be “excluded” from competing for government for a three-year period, following Rees-Mogg’s review of the evidence around the consulting firm’s role in the South African corruption scandal.
The ban comes after the UK government faced called from veteran anti-apartheid campaigner Lord Peter Hain to blacklist Bain & Co, over the part it played in allegedly facilitating the capture of the South African Revenue Service (SARS).
The consultancy stands accused of helping former South African president Jacob Zuma and a cabal of his associates seize control over SARS, in their efforts to avoid coming under the South African government department’s scrutiny.
Bain & Co later agreed to pay back the £8m worth of fees it gained through its work on the SARS contract, after Vittorio Massone, the head of the consulting firm’s South African business, exited his role as managing partner.
Former South African president Jacob Zuma was later sentenced to 15 months in prison after failing to cooperate with a corruption inquiry.
A Bain & Co spokesperson said: “We are disappointed and surprised by the Minister’s decision. We will be responding to express our concern about the process and its outcome, where recommendations from the Cabinet Office were apparently overruled, and to address inaccuracies in the Minister’s letter.”
“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.”
“Bain have apologized for the mistakes our South African office made in its work with the South African Revenue Service (SARS) and we repaid all fees from the work, with interest, in 2018.”
“Bain South Africa did not act illegally at SARS or elsewhere, and no evidence to the contrary has been put forward. Neither Commission of Inquiry in South Africa has recommended any charges to be filed. We have offered our full cooperation to the relevant authorities and will continue to do so.”