Written by: Keith Tully
Published: 13th September 2017
The public relations (PR) and communications company Bell Pottinger has fallen into administration in the UK following its involvement in a highly controversial campaign for a billionaire family in South Africa.
James Henderson, the agency’s now former chief executive, resigned from his role with the company in August amid claims that its work with the Gupta family in South Africa had served to stoke racial tensions in a country with a long history of race-based divisions.
Those claims and the scandal that followed saw Bell Pottinger forced out of Britain’s PR trade association and lose its contracts with a number of major clients, not least the banking giants HSBC and Investec, and the luxury goods company Richemont, which was founded in the 1980s by a South African businessman.
Recent days have seen the PR firm struggling to limit the financial consequences of damage done to its reputation.
However, matters have unfolded in a way that left the company’s leadership team with no choice but to call in administrators.
The administration is understood to relate only to Bell Pottinger’s UK business, with its operations in various other parts of the world expected to continue their work independently and unaffected.
Around 100 people were employed by the company in London prior to its entry into administration. Many of them were made redundant immediately upon the decision to enter the UK business into administration.
Representatives of BDO, who have been appointed as administrators, have said that they will be working with remaining partners and employees of the firm as the process of administration unfolds and maximum value is sought for the company’s creditors.
“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’),” a statement from BDO explained.
“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.”