Bell Pottinger Middle East arm to split from UK parent, saying: 'We rejected Oakbay account'

The directors of Bell Pottinger's Middle East arm say they are in discussions about a formal separation from the agency's parent, which is due to be placed in administration imminently.

Protest: members of South Africa's Democratic Alliance at Bell Pottinger's London HQ last month
Protest: members of South Africa's Democratic Alliance at Bell Pottinger's London HQ last month

The Middle East business also moved to distance itself from the recent controversy, saying it rejected an opportunity to work on the Oakbay account in South Africa that has proved so damaging to the London-based agency. Last week Bell Pottinger’s Asia business relaunched as Klareco Communications, formalising its total separation from Bell Pottinger UK.

In a statement, Bell Pottinger Middle East (BPME), based in Abu Dhabi and Dubai, said it is "in discussions to formalise a separation from its current owner Bell Pottinger Private Limited".

The statement says it follows news that "Bell Pottinger Private Limited in the UK is to be put into administration" – PRWeek reported last week that the UK business is likely to be placed in administration with BDO on Monday (11 September).

BPME directors said they are working with the UK administrators to pass ownership of the Middle Eastern agency to current management. BPME is a "separate legal entity" and therefore "not part of these [administration] proceedings" and "in a position to determine its own destiny".

The statement added: "BPME has been at pains to point out that at no point were its UAE directors ever involved in the winning or servicing of the Oakbay account in South Africa which has led to the sad demise of the UK business. Indeed, BPME’s UAE directors actually rejected the opportunity to work on the account. This reinforces BPME’s ability and intention to continue to trade under its own banner as a separate entity."

As part of the change, Amy Piek, who has worked at BPME for more than three years and helped build its Financial Communications & Investor Relations practice, has been promoted to director of the Middle East agency will immediate effect.

Tim Falconer, BPME MD, Dubai, said the agency was "receiving enquiries from a wide range of potential investors, which we will consider on their merits".

"The injection of fresh capital would enable us to make our business even stronger, through the acquisition of fresh talent and the addition of more services, especially in the digital arena. Between all three directors of BPME we have over 15 years’ experience in the Middle East, proof of our belief in and commitment to the region. Our business in the region remains strong and we are focused on continuing to deliver exceptional work on behalf of our clients."

'Exciting opportunity'

Archie Berens, BPME MD, Middle East, said: "This is an extremely exciting opportunity for us. As an independent and financially secure business with a strong and experienced team in charge of its own destiny, it will now be open to us to consider a whole range of options."

According to PRWeek’s Agency Business Report, Bell Pottinger’s Middle East business generated revenue of an estimated $3.1m in 2016. The business has represented several high-profile clients including precious metals refiner Kaloti, Savola Group and Abu Dhabi Airports.

The developments in the Middle East follow a tumultuous week for the UK agency, which one week ago saw the resignation of CEO James Henderson prior to Bell Pottinger being thrown out of the PRCA for running activities for Oakbay that were judged "likely to inflame racial discord". It led to much negative coverage in the national media.

A number of clients have severed ties with Bell Pottinger since news of the scandal emerged.

Among the senior figures at the agency to depart recently include John Sunnucks, the chairman of Bell Pottinger’s corporate and financial practice, who has set up his own consultancy. Nick Lambert, a director at Bell Pottinger who is believed to have been one of the employees suspended for his part in the Oakbay work, has also left the agency.

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