Bell Pottinger 'owes nearly £1m' to law firm that prepared Oakbay report

Bell Pottinger is understood to have entered into administration still owing nearly £1m to Herbert Smith Freehills, the law firm that prepared a report into its ill-fated work in South Africa.

The figure was reported this morning by The Times and confirmed to PRWeek by a source familiar with the matter.

The exact amount will be revealed in a new report by administrators BDO, which will be made available to creditors today, according to the paper.

Bell Pottinger went into administration at the start of September, just days after bruising criticism of work for a business ally of South African president Jacob Zuma, which stirred up racial tensions in the country. 

That media scrutiny lead to the firm's CEO James Henderson, who had commissioned the law firm's report, resigning and its PRCA membership being revoked. The full lawyers' report was never released.

The business was at that point understood to be £6m in debt, and had between 150 and 200 UK staff.

Today's Times story also says that the new report from the administrators "discloses that Bell Pottinger made a £500,000 loss in the year to December 2016". Its UK revenue was estimated at £27m for the year - the firm did not provide an official figure when PRWeek compiled its latest Top 150.

It also says "that BDO is still considering the possibility of pursuing legal action against former directors on behalf of creditors". A lawyer told PRWeek when the firm went into administration that its public statement suggested that it was assessing this option.

Since the demise of Bell Pottinger, its Asian operation has continued operating, after rebranding as Klareco.

According to LinkedIn, the MD of its Dubai operation Tim Falconer has now moved to a role with Teneo, and it is not clear what the future is for the Middle East segment of the business, which also had Abu Dhabi and Bahrain offices when it went into administration.

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