Some of Bell Pottinger’s biggest clients appear to be severing ties with the group, after the industry’s trade association earlier this week stripped it of membership following an investigation into the firm’s conduct in South Africa.
And in a further blow, Chime Communications, co-owned by advertising giant WPP and Providence Equity Partners, is reported to have returned its 27 per cent stake in the group without compensation about a fortnight ago, according to Bloomberg.
HSBC and Carillion have said that they will no longer work with Bell Pottinger, though neither firm specified the reason why.
“We have used Bell Pottinger for specific projects in the past but will not be doing so in the future,” a spokesperson for HSBC told The Independent.
In a damning statement, the Public Relations and Communications Association (PRCA) said on Tuesday that Bell Pottinger — whose clients range from multinational businesses to governments, public sector organisations, entrepreneurs and some of the world’s richest individuals — had “brought the PR and communications industry into disrepute” with a campaign in South Africa which was accused of stirring up racial tensions.
The accusations relate to Bell Pottinger’s relationship with Oakbay, a company controlled by the wealthy Gupta family of Indian-born businessmen, which has widely been accused of exerting undue influence over South African president Jacob Zuma.
The PRCA launched an investigation into Bell Pottinger following a complaint from South Africa’s main opposition party, the Democratic Alliance (DA). The DA blamed the PR company of working to “divide and conquer the South African public by exploiting racial tensions in a bid to keep Jacob Zuma and the ANC in power”.
The allegations reportedly stemmed from leaked emails that suggested Bell Pottinger had worked with Oakbay to create a “narrative that grabs the attention of the grassroots population”.
Bell Pottinger left the Oakbay account in April, and in July the group said that it had fired one partner and suspended another, as well as two other employees, as a result of the campaign. Bell Pottinger’s chief executive James Henderson resigned earlier this month. At the time he said he was “deeply sorry that this happened”.
Earlier this week, the PRCA said that it had “imposed its most serious sanctions on Bell Pottinger”. It stripped the firm of membership and the group will not be eligible to reapply for corporate membership for a minimum period of five years. It is also unable to appeal the decision.
In response to the decision, Bell Pottinger said it “accepts that there are lessons to be learned but disputes the basis on which the ruling was made” and said that it would “refocus on delivering outstanding work for our clients and looking after our people”.
It had no further comment on Wednesday.
Earlier this week, co-founder Timothy Bell, who left the firm last year, told BBC’s Newsnight programme that he thought the agency is unlikely to survive.
“It’s probably nearing the end,” Lord Bell said.
