The Asian arm of Bell Pot­tinger looks for dis­tance from its Bri­tish par­ent


The Asian arm of PR agency Bell Pot­tinger has re­branded it­self as Klareco Com­mu­ni­ca­tions and plans to sep­a­rate from the scan­dal-hit Bri­tish par­ent which is ex­pected to go into ad­min­is­tra­tion soon.

Un­til re­cently one of the world’s big­gest PR firms, Bell Pot­tinger has put it­self up for sale af­ter los­ing clients for run­ning a racially charged cam­paign in South Africa which has led to it be­ing shunned by its peers.

As a re­sult the firm’s sec­ond-big­gest share­holder, Chime, has writ­ten off its 25% stake and its chief ex­ec­u­tive and big­gest in­vestor have quit.

Co-founder Tim Bell, who re­signed last year, said on Wed­nes­day the agency was now “close to the end”.

“I think it’s very sad that some­thing that I ran for years and years has been de­stroyed in less than a year,” he told Reuters.

Ear­lier this week the firm said it had ap­pointed ac­count­ing firm BDO to ad­vise it on a pos­si­ble sale but no buy­ers have emerged and ad­min­is­tra­tion is now in prospect, a source fa­mil­iar with the mat­ter said.

Bell Pot­tinger in Lon­don said yes­ter­day only that the firm was “look­ing at all op­tions”.

The heads of Bell Pot­tinger’s Asian busi­ness, run as a legally sep­a­rate en­tity, said they now plan to re­launch as an in­de­pen­dent firm called Klareco Com­mu­ni­ca­tions with a new own­er­ship struc­ture.

“While the UK busi­ness is ex­pected to go into ad­min­is­tra­tion as early as next week, the Asia busi­ness is en­tirely ring-fenced and sol­vent,” Klareco said in a memo to clients. Klareco means clar­ity in Esperanto. Lloyds Bank­ing Group, Bri­tain’s big­gest mort­gage lender, will be among its big­gest cred­i­tors if the group fails to find a buyer. Lloyds may ap­point an ad­min­is­tra­tor if the com­pany fails to make pay­ments on the debt, ac­cord­ing to Bell Pot­tinger’s reg­u­la­tory fil­ings from March, which did not dis­close the size of the loan.

Lloyds de­clined to com­ment. On Tues­day Bri­tain’s Pub­lic Re­la­tions and Com­mu­ni­ca­tions As­so­ci­a­tion (PRCA) ex­pelled Bell Pot­tinger for a min­i­mum of five years, an un­prece­dented step for such a prom­i­nent mem­ber, for run­ning the South African cam­paign in sup­port of Pres­i­dent Ja­cob Zuma.

It had been work­ing with the pres­i­dent’s son and the in­flu­en­tial Gupta fam­ily on a po­lit­i­cal cam­paign that South Africa’s main op­po­si­tion party, the Demo­cratic Al­liance de­scribed as a bid to “di­vide and con­quer” the pub­lic.

Ac­cord­ing to an email pub­lished in South African me­dia, Bell Pot­tinger said the cam­paign needed to stress the con­tin­ued “ex­is­tence of eco­nomic apartheid”.

The PRCA said the cam­paign had de­lib­er­ately in­flamed racial ten­sions.

Bell Pot­tinger has apol­o­gised for the cam­paign and de­scribed it as “in­ap­pro­pri­ate and in­sen­si­tive”, but it dis­puted the ba­sis on which the PRCA rul­ing was made.

Bell Pot­tinger, which has its head­quar­ters in the build­ing across this un­der­ground train sta­tion in Lon­don, is in trou­ble over its ‘di­vide and con­quer’ South African cam­paign.

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