'Race hate' PR firm enters administration

'Race hate' PR firm enters administration

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Disgraced public relations firm Bell Pottinger has fallen into administration after being accused of running a “racially divisive campaign” in South Africa.

The scandal caused a mass of exodus of investors and clients, including construction firm Carillion, HSBC and the banking group CYBG.

Last week executives at Bell Pottinger told staff that the company’s financial position had become parlous and that they could choose to terminate their employment immediately.

Accountancy firm BDO was appointed appointed as administrators on Tuesday after the once leading City PR firm failed to find a rescue buyer.

It has not been confirmed exactly how many of the company’s staff of about 200 have been made redundant.

South African President Jacob Zuma speaks at a memorial lecture
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The firm ran a campaign against opponents of South African President Jacob Zuma

A spokesman for BDO said: “Following an immediate assessment of the financial position, the administrators have made a number of redundancies.

“The administrators are now working with the remaining partners and employees to seek an orderly transfer of Bell Pottinger’s clients to other firms in order to protect and realise value for creditors.

“We have taken appropriate steps to preserve the rights Bell Pottinger may have in relation to the failure of the business.”

The administration will not affect the company’s international operations, which BDO said would continue to trade under the control of their own management teams.

Phumzile Van Damme, of the Democratic Alliance, outside the Bell Pottinger offices in London
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Phumzile Van Damme, of South Africa’s Democratic Alliance, outside the Bell Pottinger offices in London in August

The crisis was triggered when South Africa’s main opposition party, the Democratic Alliance, complained about the PR company’s campaign for Oakbay Capital – an investment holding firm run by the billionaire Gupta family.

Its said the campaign portrayed opponents of President Jacob Zuma as agents of “white monopoly capital” and coined slogans of “economic apartheid”.

An independent report by law firm Herbert Smith Freehill subsequently said the campaign was “potentially racially divisive” and in “in breach of relevant ethical principles”.

Following the report the Public Relations and Communications Association expelled Bell Pottinger for five years, saying it had breached its ethical code.

The company’s chief executive James Henderson also resigned. He said he had been “misled” over the campaign by colleagues but accepted he was ultimately accountable.



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