Bain & Co. Considering Pushback on U.K. Contracting Ban

Recently, the U.K. government handed down a three-year ban against Bain & Company, forbidding the global consultancy from bidding on public sector contracts in the country after it was embroiled in a South African corruption scandal.

The Financial Times, citing a person with knowledge of the matter, reported that the company is considering “all options…including judicial review” in an attempt to push back against the ban, which took force effective January 4, 2022. The U.K. government notified the firm of the ban in a letter from Cabinet Office minister Jacob Rees-Mogg, after former Labour minister and anti-apartheid campaigner Lord Peter Hain called for action in the wake of the scandal’s impact on the government and people of South Africa.

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Bain stands accused of colluding with other private sector companies and former South African president Jacob Zuma to undermine the South African Revenue Service as part of the former leader’s efforts to avoid tax scrutiny. The scandal went further than tax evasion, resulting in Zuma and his supporters using the upheaval at the tax agency to take greater control over the National Treasury, further enriching themselves at the expense of the people and government of South Africa. Consulting firm KPMG has also been embroiled in the scandal and was investigated for its role in producing an inaccurate audit under a $2 million contract.

"Bain has apologized for the mistakes our South African office made in its work with the South African Revenue Service, 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,” said a Bain spokesperson in a public statement. “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."

While it is possible that Bain may be able to reverse or at least scale back their punishment, public sentiment in the U.K. and South Africa may weigh heavily against the firm, potentially influencing the outcome of their efforts to restore their standing in the U.K. public sector market.