Bell Pottinger, one of the giants of the Square Mile’s public relations industry, was last night booted out of the sector’s trade association following a probe into controversial work it undertook in South Africa – and the company’s founder said he believes this may be the end for the firm.
Lord Bell told the BBC that the current crisis engulfing the PR firm was “almost certainly” curtains for the group he helped to establish in 1987. He left the company last August.
Bell said he did not accept responsibility for the actions of the company, adding that chief executive James Henderson, who resigned over the weekend, was to blame. “Of course [he] is to blame, of course he should have resigned,” Bell said.
Henderson stepped down ahead of the publication of a report by Herbert Smith Freehills, which said material produced as part of Bell Pottinger’s work for Oakbay Capital “was potentially racially divisive and/or potentially offensive and was created in breach of relevant ethical principles”. The report also concluded that there had been failings among senior staff.
“I recognise the business requires a change of leadership to fix the problems of the past and to move forward,” Henderson said.
He added: “Although I neither initiated nor was involved in the Oakbay work, I accept that as CEO, I have ultimate executive responsibility for Bell Pottinger.
“I feel deeply let down by the colleagues who misled me. However, I think it is important I take proper accountability for what has happened.”
The Public Relations and Communications Association (PRCA) said Bell Pottinger had “brought the PR and communications industry into disrepute with its actions, and it has received the harshest possible sanctions”.
“The PRCA has never before passed down such a damning indictment of an agency’s behaviour,” it added.
Francis Ingham, the PRCA’s director general, said the company’s work for Oakbay Capital, a South African company owned by the powerful Gupta family, had “incited racial hatred” and was “absolutely unthinkable”. The agency instigated a campaign emphasising the dominance of white-owned businesses in the country and promoted the #WhiteMonopolyPower hashtag.
The PRCA’s investigation was launched earlier in the summer following a complaint by South African opposition party the Democratic Alliance. Following the probe, which took evidence from both sides, the PRCA board unanimously agreed to terminate Bell Pottinger’s membership.
One PR industry veteran told City A.M. last night: “Bell Pottinger was never exactly at the forefront of industry efforts to improve standards.”
Iain Anderson, a fellow of the PRCA and executive chairman of Cicero, said: “What happened here was fundamentally a governance question. 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.”