French financial prosecutors have seized €65 million from the French arm of McKinsey & Company as part of an ongoing investigation into alleged tax fraud and money laundering. This provisional seizure, which includes both cash and property, was first reported by Le Parisien newspaper and later confirmed by the financial prosecutor's office (PNF).
The investigation, which began in late 2022, is focused on whether McKinsey avoided paying corporate taxes in France for more than a decade, despite generating substantial revenue from consulting contracts, including significant work for the French government. A Senate report published in March 2022 highlighted that McKinsey had paid no corporate profit tax in France between 2011 and 2020, even while earning tens of millions of euros from its French operations. This report ignited public and political scrutiny, leading President Emmanuel Macron to express his shock at the suspicions of tax evasion by consulting firms.
McKinsey has consistently denied any wrongdoing, stating it fully complies with all French tax rules applicable to its legal form and operations. The firm has also indicated its full cooperation with French authorities throughout the investigation. The seizure is a significant development, allowing authorities to secure assets that could be used to pay potential fines or damages if the firm is found guilty. The probe has also expanded to include suspected favoritism and alleged illegal financing of Macron's 2017 and 2022 election campaigns in connection with consulting contracts, although the PNF has not confirmed targets related to Macron's campaigns.
The "McKinsey Affair" has become a notable controversy in France, drawing criticism from opposition parties regarding the government's reliance on private consultants and the firms' tax practices. The preliminary investigation does not imply guilt and could take years to resolve, potentially leading to a trial or being shelved. This seizure underscores the seriousness of the allegations and the French authorities' commitment to pursuing tax fraud cases.
