PR firm Bell Pottinger collapses after South African racism scandal

A DISGRACED public relations firm accused of stoking racial tensions in South Africa has collapsed into administration.

After efforts to find a buyer for Bell Pottinger failed, administrators yesterday said they had taken charge of the UK arm and were laying off staff.

Bell Pottinger has been in crisis after being accused of running a ‘racially divisive’ campaign for the Gupta family in South Africa, sparking an exodus of its biggest clients and leaving its finances in tatters.

Last night accounting giant KPMG also faced questions over its dealings with the Guptas. Save South Africa, a campaign group that played a key role in exposing Bell Pottinger’s controversial tactics, has called on Johannesburglisted companies and banks to boycott KPMG and claims the auditor could be ‘the next Bell Pottinger’. They said: ‘We call on corporate South Africa to urgently review business relations with KPMG.’ A KPMG International spokesman said it was taking the allegations ‘incredibly seriously’ and has launched a review of its work for the Guptas.

Bell Pottinger has suffered a series of heavy blows after its work for the Guptas was reported.

Law firm Herbert Smith Freehills released a report saying its campaign for the family was intended to promote a narrative of ‘economic apartheid’ in South Africa. Negative campaign materials allegedly attacked wealthy white South Africans.

The PR firm’s chief executive, James Henderson, resigned just days before the report’s publication.

Since it was exposed, the company has been kicked out of a leading industry group, ditched by its second major shareholder, and abandoned by several key British clients, including Investec, Richemont, Unite and Carillion, throwing it into financial turmoil.

Yesterday administrators appointed at BDO would not say how many staff had been made redundant but reports suggested Bell Pottinger had about 50 employees. BDO said: ‘Following an immediate assessment of the financial position, the administrators have made a number of redundancies.’

The spokesman added: ‘The company has been heavily financially impacted by the well-publicised issues resulting in losses of clients, partners and staff.’