Wednesday 17 April 2019 12:11 pm

Bell Pottinger partners could face legal action over disgraced PR firm's collapse

Former partners of the disgraced PR firm Bell Pottinger could face legal action over its collapse, administrators BDO have warned.

The PR company collapsed in 2017 following a scandal over its work for the Gupta family in South Africa, where it was accused of deliberately inciting racial hatred.

Read more: Insolvency Service launches probe into disgraced PR firm Bell Pottinger

BDO could now bring lawsuits against partners involved in the controversial contract on the grounds they breached partnership agreements, The Times reported.

The accountancy firm said it would approach creditors, owed a combined £14m, to discuss launching claims.

In an administrators’ report BDO said: “Certain members [of Bell Pottinger] failed in their duty to act in good faith and in accordance with applicable standards of corporate governance.

“The relationship between the actions of these members and the financial failure of the limited liability partnership appears strongly correlated.”

BDO could also sue Bell Pottinger’s co-founder Lord Bell over comments he made on the BBC’s Newsnight shortly before the company’s collapse.

Lord Bell said the company would “almost certainly” fail to recover but that it was “nothing to do with me.”

It is also reported chasing more than 40 former partners for a total of £4m in profits.

While working for the Gupta family, Bell Pottinger was accused of leading a campaign using fake social media accounts which stirred up racial tensions and provoked anger about “white monopoly capital” to divert attention from the family and their strong links to South African president Jacob Zuma through the family’s Oakbay Investments firm.

Read more: Demise of a PR giant: The inside story of Bell Pottinger's collapse

Following the scandal, Bell Pottinger’s chief executive James Henderson was forced to resign, before the company became only the second City firm to be chucked out of industry trade body the Public Relations and Communications Association (PRCA).

The company lost a number of important clients and entered into administration in September 2017.