PR empire built by Thatcher guru falls apart in racism row
‘Brought industry into disrepute’
TWO major clients walked away from one of Britain’s top PR firms yesterday amid a racism scandal.
HSBC and building giant Carillion acted after Bell Pottinger – co-founded by Margaret Thatcher’s favourite spin doctor – became mired in accusations it stoked racial tensions in South Africa.
The firm allegedly used a fake blog and false Twitter accounts to stir up anger over the wealth of white South Africans. It is claimed the company aimed to distract attention from controversy about the influence of its owners, the Indian- born billionaire Gupta brothers.
An HSBC spokesman said yesterday: ‘We have used Bell Pottinger for specific projects in the past but will not be doing so in the future.’ Carillion, which specialises in huge projects such as the Battersea Power Station conversion, confirmed: ‘We no longer work with Bell Pottinger.’
The disgraced agency, co-founded by ex-Thatcher advisor Tim Bell, now Lord Bell, was also recently dumped by Unite Students, which develops and manages properties.
Yesterday a major investor handed back its 27 per cent share in the firm, writing off the value.
Chime, part of Sir Martin Sorrell’s WPP, had been trying to sell but opted to cut its losses after the value of the stake plummeted.
Bell Pottinger has been blighted by controversy over its work for Oakbay Capital, a South African investment firm owned by the Gupta brothers.
The PR agency was paid £100,000 a month to deflect focus away from accusations that the tycoons are too close to South African president Jacob Zuma and influence his decisions for their own gain.
The company commissioned writers who used racially loaded terms like ‘white monopoly capital’ and misled or undermined journalists who questioned its claims.
A review by law firm Herbert Smith Freehills said Bell Pottinger’s campaign was likely to ‘inflame racial discord’. The row has prompted widespread criticism of Mr Zuma and the Guptas’ influence, leading to four major banks reportedly closing accounts connected to the family.
The fallout at Bell Pottinger has been dramatic. Chief executive James Henderson quit at the weekend after firing Victoria Geoghegan, the partner in charge of the Oakbay account. The company has also been expelled from the PR and Communications Association for at least five years.
Director general of the trade body, Francis Ingham, said Bell Pottinger had ‘brought the PR and communications industry into disrepute’.
Lord Bell, who resigned as chairman of the 30-year-old firm a year ago, admitted on Monday that it was unlikely to recover. Asked whether it was ‘curtains’, he said: ‘Almost certainly’. The peer added: ‘But it’s nothing to do with me.’
He went to South Africa to talk to Oakbay before he stepped down. But during a disastrous TV interview on Newsnight, he flip-flopped over the course of events and was also interrupted by his mobile phone three times during the six-minute exchange.
Last year luxury goods firm Richemont cut its ties with Bell Pottinger after its South African chairman Johann Rupert was targeted by one of the agency’s smear campaigns. Wealth managers Investec also ditched the company in 2016.
Other major customers are under pressure to follow suit, including Bloomsbury Publishing, Cineworld and Waitrose.