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Bell Pottinger collapses after South African scandal

12 September 2017

The association expelled Bell Pottinger for a minimum of five years.

Bell Pottinger's Middle Eastern division is in discussions with its London parent in an effort to sever ties between the two as rumours circulate of the public relations firms' demise.

The level of its losses and the inability to win new clients left the firm with no other option, BDO said.

The administrators BDO said the firm had been "heavily financially impacted" by the scandal.

The company's actions "brought the industry into disrepute", the U.K.'s Public Relations and Communications Association said.

The work was criticised for presenting opponents of President Jacob Zuma and the Guptas as agents of "white monopoly capital". Both have previously denied such a relationship.

Hogan Lovells is advising Lloyds Banking Group as the agency's biggest lender.

The administrators have not confirmed how many staff have been made redundant as a result, though recent reports suggested Bell Pottinger had about 250 employees.

Last week, the Guardian revealed that the agency's second-biggest shareholder Chime, which is owned by United States firm Providence and Sir Martin Sorrell's WPP, had handed back its 27% stake for free to escape the scandal.

The outcry led to the resignation of Bell Pottinger CEO James Henderson, also its biggest shareholder, while its second-biggest investor wrote off its stake.

Co-founded in 1987 by Bell, Margaret Thatcher's favourite ad man, the agency built its reputation on a mix of high-profile City companies and taking on sensitive geo-political clients that others may have balked at.

The company represented Oscar Pistorius, the South African Olympic athlete, after he was charged with murder.

"This outcome reflects the huge importance that the PRCA places on the protection of ethical standards in the business of PR and communications."Bell Pottinger said it acknowledges the ruling, "accepts that there are lessons to be learned but disputes the basis on which the ruling was made". They included short news segments made to look like Arabic news networks and fake insurgent videos.

Bell Pottinger collapses after South African scandal