Bell Pottinger’s Middle Eastern arm is in talks to formally separate from its parent company, which is expected to fall into administration on Monday.
Bell Pottinger Middle East (BPME), which is based in Abu Dhabi and Dubai, follows the firm’s Asian arm in seeking to sever ties with the disgraced PR agency. It emerged on Friday last week that the Asian firm was renaming itself Klareco Communications.
Bell Pottinger’s London-based staff, numbering around 180, were informed on Friday afternoon that the company will likely fall into administration early this week. Sources told City A.M. staff were fearful the firm would not be able to pay their September salaries.
Last weekend, Bell Pottinger chief executive James Henderson resigned ahead of the publication of a report by Herbert Smith Freehills into the firm’s controversial work in South Africa for Oakbay Capital. The report found a campaign it orchestrated was “potentially racially divisive and/or potentially offensive and was created in breach of relevant ethical principles”.
The Holborn-headquartered firm was subsequently kicked out of the Public Relations and Communications Association (PRCA) last Monday.
Several high-profile employees, including head of financial PR John Sunnucks, followed Henderson out of the door.
Founded in 1987, Bell Pottinger is expected to collapse into administration on Monday, a week after the Herbert Smith Freehills report was published.
Founder Tim Bell said last week that the firm will “almost certainly” not be able to survive the scandal. His co-founder, Piers Pottinger, said he was “deeply saddened” by the events.