The agency, keen to promote the rice and corn snack to women, came up with the idea of producing a hat using the product and recruiting James Bond actress Catherine McQueen to wear it on Ladies' Day.
The Daily Express ran a half-page story the next day, stating that Ascot chiefs had ejected the actress after discovering her hat was part of a commercial promotion.
But when PRWeek called, agency staffers insisted they were mystified.
'We do not know where they (the Express) got that from, it was a complete fabrication,' said a spokesperson, who denied McQueen was booted out.
'Ascot say she would only have been kicked out is if she was in the Royal enclosure without a ticket, which she wasn't,' the spokesperson added.