PR firm faces backlash for 'stoking racism'

By Sunita Patel-Carstairs, Business Reporter
A British public relations agency has lost clients and its second-largest investor after being expelled from the industry's trade body amid accusations it stoked racial tensions in South Africa.
An investigation by the UK's Public Relations and Communications Association (PRCA) found London-based Bell Pottinger's work for Oakbay Capital, an investment holding firm run by the billionaire Gupta family, was likely to "inflame racial discord" in the country.
It followed a complaint by South Africa's main opposition party, the Democratic Alliance (DA), about the PR company's campaign for the family which portrayed opponents of President Jacob Zuma as agents of "white monopoly capital" and coined slogans of "economic apartheid".Mr Zuma and the Guptas - accused of wielding undue political influence over the South African government - have always denied any wrongdoing in their relations.PRCA director general Francis Ingham said Bell Pottinger had brought the PR and communications industry "into disrepute with its actions" and that the trade association had decided to hand down the "harshest possible sanction" in its history.Banning the firm from its membership for at least five years, he said the PRCA "has never before passed down such a damning indictment of an agency's behaviour".
PR firm faces backlash for 'stoking racism'

Phumzile Van Damme, of the DA, outside the Bell Pottinger offices in London in August
"This outcome reflects the huge importance that the PRCA places on the protection of ethical standards in the business of PR and communications," he said."There is something rotten at the heart of this company," he told Reuters."The work in South Africa was a completely reprehensible piece of work. I haven't seen work of this nature at any point in the past and I hope never to see it again in the future.
"The view of the PRCA board was that Bell Pottinger's actions were deliberately intended to create exactly the result they did - stirring up racial hatred in a very sensitive area of the world."The ruling comes just days after an independent report, conducted by law firm Herbert Smith Freehills (HSF), said "BP's senior management should have known that the campaign was at risk of causing offence, including on grounds of race".Ahead of its release, the PR firm's chief executive James Henderson claimed he had been "misled" over the campaign by colleagues and announced his resignation so the agency could "fix the problems of the past and move forward".In a statement, Bell Pottinger said it accepted there were lessons to be learned, but disputed "the basis on which the ruling was made".It said the South Africa contract was not representative "of the way it works in general" and it would continue to abide by the PRCA's code of ethics.The company has faced a growing backlash.In a statement, fellow communications firm Chime confirmed it "no longer had a stake in Bell Pottinger" - writing-off the value of its 27% holding after failing to find a buyer.At least four major clients, including Investec, are also understood to have responded to the report by ditching its PR services.
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