Former partners at the disgraced PR firm Bell Pottinger have been forced to repay hundreds of thousands of pounds in salaries they earned before the business collapsed.
The London-based PR company went into administration in 2017 following a scandal over its work for the billionaire Gupta family in South Africa, where it was accused of deliberately inciting racial hatred.
Administrators at BDO have launched a bid to claw back the outstanding £7m owed to the firm’s creditors. As part of this, BDO is chasing 44 former Bell Pottinger partners to recoup a total of £4m.
In its latest administrators’ report, the accountancy firm said it had made “good progress” in its efforts, securing £157,000 from 12 partners and £311,000 from a further nine. BDO said it was in discussions with 17 other partners, while two could not be contacted.
The partners are liable to repay the sums, the administrators said, as they represented an advance salary based on Bell Pottinger’s estimated profit for 2017. However, the PR firm fell to a £2.7m loss in its last year of trading, meaning the amount paid was not valid.
While the report did not name the partners, former chief executive James Henderson is not believed to have repaid any of the profit he made in the final year. City A.M. understands the boss has disputed the amount of money BDO has asked for.
BDO has previously said it was considering legal action against former Bell Pottinger partners involved in the controversial Gupta contract, saying they breached partnership agreements through misconduct.
The administrators have also threatened to file a £1m lawsuit against co-founder Lord Bell, who died earlier this year, over disparaging comments he made on the BBC’s Newsnight.
The money raised from partners will be used to pay back Bell Pottinger’s creditors, the largest of which is Lloyds Bank, which is still owed £5.1m. BDO will also use the funds to pay its own fees, which currently total £1.2m.
A BDO spokesperson said: “Our work on the administration of Bell Pottinger is now complete, and the steps taken to date in accordance with our statutory duties are documented in the final administrators’ progress report.
“Now acting as joint liquidators of Bell Pottinger, we continue to seek to maximise returns to the creditors of the business.”
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