'No other option': Bell Pottinger goes into administration

BDO has this afternoon confirmed that Bell Pottinger has gone into administration.

'No other option': Bell Pottinger goes into administration

The firm's swift demise stems from a campaign run for allies of South African president Jacob Zuma, which a PRCA committee deemed "by any reasonable standard of judgement likely to inflame racial discord" in the country. The firm was thrown out of the PRCA, its CEO having resigned the previous day.

While it was initially hoped by some in the company that it might be saved and continue operating under new leadership, staff were informed last week that administration was likely, with BDO brought in to explore its options.

A BDO statement said: "Following an immediate assessment of the financial position, the administrators have made a number of redundancies.

"The administrators are now working with the remaining partners and employees to seek an orderly transfer of Bell Pottinger’s clients to other firms in order to protect and realise value for creditors. We have taken appropriate steps to preserve the rights Bell Pottinger may have in relation to the failure of the business."

The firm had around 250 staff globally at the end of last year, according to the PRWeek Global Agency Business Report, around three-quarters of whom were in the UK.

The firm's Asian operation has announced its intention to rebrand and continue trading, saying it is a separate legal entity. The firm's Middle East office has also said it hopes to separate, and BDO said today it would continue to trade.

PRCA director general Francis Ingham said the PRCA "takes no pleasure" in the firm's demise, commenting: "The majority of those employed by Bell Pottinger bear no responsibility for the company’s actions in South Africa.

"They have been caught up in an ethical crisis that is not of their making. We hope that they will find new positions with ethical employers shortly. We are clear however that expelling Bell Pottinger was the right thing to do."

"The vast majority of the PR and communications industry is ethical and professional. By taking decisive action, we have shown that Bell Pottinger’s actions are the exception not the rule; and shown that PRCA self-regulation is decisive and effective."

'Heavy financial impact'

The full press release from BDO, issued by the agency Osborne and Partners, follows:

"Bell Pottinger has been heavily financially impacted by the well-publicised issues resulting in losses of clients, partners and staff and culminating in the expulsion from the Public Relations and Communications Association (‘PRCA’)."

"Late last week, the level of those losses, compounded by the inability of the business to win new clients, was such that remaining management were left with no option but to commence the process to place all UK Bell Pottinger entities into administration.

"A notice of intention to appoint three partners in BDO as administrators was filed on the evening of Friday 8 September 2017. The appointment became effective today, 12 September 2017.

"The entities in administration are: Bell Pottinger Private Ltd, Bell Pottinger LLP and Bell Pottinger Services Ltd. None of the subsidiaries outside the UK is in administration; they continue to trade under the control of their separate management teams."

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