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Scandal-hit Bell Pottinger on brink of collapse

Bell Pottinger could fall into administration as early as next week, staff have been told, as the fallout from a divisive campaign it ran in South Africa accused of stoking racial tensions threatens to force the City PR firm under.
A source at the company said the agency’s chairman Mark Smith and a representative of accountant BDO – a firm drafted in earlier this week to try and find a buyer – met with more than 100 employees at the firm’s London HQ this afternoon.
“We were told the sale process had not been successful and the last interested party, a trade party, had withdrawn,” the source said.
“They added that liabilities are now starting to outstrip assets, and that this is likely to worsen and the directors have a statutory duty to consider an insolvency process.”
Staff were asked to continue to work, the source added, but were told their pay could not be guaranteed, although they were advised that “we hope and expect to pay you for every day that you work”.
Scandal-hit Bell Pottinger on brink of collapse

Bell Pottinger's CEO James Henderson quit last weekend

Credit:
David M. Benett
/ Getty Images Europe
This provoked “a strong reaction”, particularly from younger staff, the source said, although he expected people to continue to come to work.
“It’s a very difficult time for a business that was once at the top of its game,” he added.
The source’s account was corroborated by two senior PR sources who had worked at Bell Pottinger and heard the developments from former colleagues still based at the company.
This week Bell Pottinger was kicked out of Britain’s PR trade body, abandoned by key clients including bank HSBC, dumped by its second-biggest investor Chime and hit by stinging criticism in an independent report that its top managers had mishandled the work. Chief executive James Henderson quit ahead of the revelations last weekend.
The fallout is from work Bell Pottinger undertook for billionaire family the Guptas that included a campaign that targeted wealthy white South African business rivals to allegedly deflect attention from the Guptas’ close links to president Jacob Zuma.
The company’s corporate and financial PR chairman John Sunnucks has also left this week, and is understood to be teaming up with Tim Collins, chairman of the political practice, on a new venture.
BDO declined to comment. Bell Pottinger was unavailable for comment.
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