Bell Pottinger calls in BDO as administrators

Three partners at BDO have been named as administrators to PR firm Bell Pottinger which has collapsed after haemorrhaging clients following public condemnation of a highly controversial campaign the agency ran in South Africa

Bell Pottinger’s PR and social media work on behalf of Oakbay Capital was widely criticised for being racially charged, and high profile clients, including HSBC, Waitrose and TalkTalk cut all ties with the company. Its chief executive, James Henderson, resigned at the start of the month.

In a statement, BDO said Bell Pottinger ‘has been heavily financially impacted by the well-publicised issues resulting in losses of clients, partners and staff and culminating in the expulsion from the Public Relations and Communications Association (PRCA).

‘Late last week, the level of those losses, compounded by the inability of the business to win new clients, was such that remaining management were left with no option but to commence the process to place all UK Bell Pottinger entities into administration.’

The entities in administration are:  Bell Pottinger Private Ltd, Bell Pottinger LLP and Bell Pottinger Services Ltd. None of the subsidiaries outside the UK is in administration; they continue to trade under the control of their separate management teams.

A BDO spokesman said: ’Following an immediate assessment of the financial position, the administrators have made a number of redundancies. 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.

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

Bell Pottinger had around 250 staff, and around half are believed to have been made redundant. Its subsidiaries in Asia and the Middle East, which are legally separate, have already moved to rebrand as separate entities.

The agency was co-founded by Lord Bell, who acted as media advisor to former Conservative prime minister Margaret Thatcher, and is no stranger to controversy, with a client list that has included Syria’s first lady, Asma al-Assad, the governments of Bahrain and Egypt, and Oscar Pistorius, after he was charged with murder.

Bell sold his remaining stake in Bell Pottinger earlier this summer, claiming he was unhappy with the company’s campaign in South Africa on behalf of the Gupta family which owns Oakbay Capital. This was widely viewed as racially divisive, with a focus on ‘economic apartheid’.

Last week the PRCA trade body terminated Bell Pottinger’s membership with immediate effect and banned it from reapplying for a minimum period of five years in what it described as ‘the harshest possible sanctions’ and ‘a damning indictment of an agency’s behaviour’.

Report by Pat Sweet

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