Bell Pottinger on brink of collapse after expulsion from PRCA
Bell Pottinger, one of the City's largest public relations firms, is facing collapse as clients are expected to jump ship after it was ejected from the industry trade body on Tuesday over its highly controversial 'White Monopoly Capital' campaign in South Africa.
The decision by the Public Relations and Communications Association marked the first time a firm as prominent as Bell Pottinger has been expelled and director-general Francis Ingham said it was "very questionable" as to whether or not the agency would survive as he expected further clients to abandon ship following the sanction.
Major shareholder Chime Communications, which was bought by WPP in 2015, has stated that it no longer holds an interest in the PR firm, having given its 27% stake back to Bell Pottinger for free, according to reports.
Bell Pottinger's work for South African company Oakbay Capital, which is controlled by the Gupta family, had "incited racial hatred", Ingham said.
South African opposition party the Democratic Alliance made a complaint to the PRCA, accusing Bell Pottinger of a "hateful and divisive campaign to divide South Africa" by using taglines such as "white monopoly capital" and referring to an "economic apartheid" in South Africa.
Jacob Zuma, the incumbent president of South Africa, had previously faced allegations of corruption over his ties with the Guptas, although both had denied any such ties between the two.
Bell Pottinger said it "accepts that there are lessons need to be learned" in regards to the controversial campaign.
James Henderson, chief executive of Bell Pottinger resigned before the expulsion was handed which Ingham referred to as "necessary, but not sufficient".
Henderson claimed, "I neither initiated nor was involved in the Oakbay work, I accept that as CEO, I have ultimate executive power for Bell Pottinger," before going to say, "I feel deeply let down by the colleagues who mislead me. However, I think it is important I take proper accountability for what has happened."
This led Iain Anderson, a fellow of the PRCA, to say, "For any chief executive to say he didn't know what was going on is like the head of a bank saying they didn't know about subprime lending."
Lord Bell, who founded the firm in 1987, said that this was "almost certainly" the straw to break the camel's back.
Bell Pottinger has made a habit of accepting controversial clients, from former South African president FW de Klerk who opposed Nelson Mandela; Asma al-Assad, wife of Syrian president Bashir al-Assad; and athlete Oscar Pistorius after he had been charged with murder.
Bell, who left the company in August last year, said he did not accept any responsibility for its actions.