Bell Pottinger: Disgraced British PR firm enters administration after South Africa racial row

'The administrators have made a number of redundancies'

The Public Relations and Communications Association (PRCA) last week stripped the group of membership (Reuters)

Disgraced British PR firm Bell Pottinger has gone into administration after a divisive campaign in South Africa sparked industry outrage, leading to an exodus of clients and prompting the industry trade body to strip it of membership.

Accountancy and business advisory firm BDO said on Tuesday that three of the group’s operating entities in the UK – Bell Pottinger Private Ltd, Bell Pottinger LLP and Bell Pottinger Services Ltd – had been placed into administration.

“Following an immediate assessment of the financial position, the administrators have made a number of redundancies,” a spokesperson for BDO said.

“The administrators are now working with the remaining partners and employees to seek an orderly transfer of Bell Pottinger’s clients to other firms in order to protect and realise value for creditors,” the spokesperson added.

“We have taken appropriate steps to preserve the rights Bell Pottinger may have in relation to the failure of the business.”

None of Bell Pottinger’s subsidiaries outside the UK are in administration. They continue to trade under the control of their separate management teams, BDO said.

Tuesday’s announcement marks a bitter conclusion to the swift demise of one of the UK’s most well-known public relations firms.

The Public Relations and Communications Association (PRCA) last week stripped the group of membership, saying that it had “brought the PR and communications industry into disrepute” with a campaign in South Africa that was accused of stirring up racial tensions.

The company was understood to have been haemorrhaging clients for several weeks prior to that and a major shareholder last month wrote off its stake.

The accusations relate to Bell Pottinger’s relationship with Oakbay, a company controlled by the wealthy Gupta family of Indian-born businessmen, which has widely been accused of exerting undue influence over South African President Jacob Zuma.

The PRCA launched an investigation into Bell Pottinger – whose clients had ranged from multinational businesses to governments, public sector organisations, entrepreneurs and some of the world’s richest individuals – following a complaint from South Africa’s main opposition party, the Democratic Alliance (DA).

The DA blamed Bell Pottinger of working to “divide and conquer the South African public by exploiting racial tensions in a bid to keep Jacob Zuma and the ANC in power”.

The allegations reportedly originally stemmed from leaked emails that suggested Bell Pottinger had worked with Oakbay to create a “narrative that grabs the attention of the grassroots population”.

Bell Pottinger left the Oakbay account in April, and in July the group said that it had fired one partner and suspended another, as well as two other employees, as a result of the campaign.

Bell Pottinger’s chief executive James Henderson, who at the time said that he was “deeply sorry that this happened”, resigned earlier this month.