Bell Pottinger will be given a “disciplinary sanction” by the UK’s public relations trade body over allegations that the leading PR firm ran a secret campaign to stir up racial tension in South Africa on behalf of its billionaire clients.
A Public Relations and Communications Association (PRCA) hearing last week heard allegations that Bell Pottinger sought to stir up anger about “white monopoly capital” and the “economic apartheid” in South Africa to draw attention away from the wealthy and controversial Gupta family, who have been accused of benefiting financially from their close links to the South African president, Jacob Zuma.
Democratic Alliance, the South African opposition party which lodged a formal complaint with the PRCA about Bell Pottinger, issued a statement on Thursday saying it had received confirmation that the complaint had been upheld.
The PRCA declined to comment on what action it was considering taking against Bell Pottinger. A final decision will be published in the week of 4 September.
Francis Ingham, the PRCA’s director general, said: “Our final decision on this case will be made once it has been through the full and balanced process set out in our professional charter and codes of conduct, including any appeals. We can’t comment further while the process is ongoing.”
The Guardian understands that the PRCA is considering a range of actions it could take against Bell Pottinger, including terminating its membership of the trade body. Only one PR company has ever had its membership terminated. Other possible disciplinary options include a formal warning or reprimand.
James Henderson, Bell Pottinger’s chief executive, was hauled before the PRCA’s disciplinary committee last week to answer accusations that the firm ran a “hateful and divisive campaign to divide South Africa along the lines of race”.
Henderson told the Guardian that Bell Pottinger’s board was “considering all options” for the future of the business in the wake of the scandal. Those options are understood to include the sale of Henderson’s stake in the company, which would lead to his exit from the firm.
Henderson denied rumours that he had resigned. When asked whether he had offered to resign, he said: “No comment.”
“We are looking at all options for the company, including future ownership,” he said. “We are looking at the structure of the business at this stage. As [I am] a significant shareholder you can draw your own conclusions.”
He said several parties had approached the company about the possibility of acquiring an ownership stake.
Kevin Read, a Bell Pottinger partner, has resigned from the PRCA’s board before of its meeting to decide what sanction to issue against the PR firm, founded by Margaret Thatcher’s spin doctor Lord Bell.
Bell Pottinger is accused of orchestrating the creation of fake Twitter accounts to target prominent white businesspeople in South Africa to draw attention away from the Gupta family.
The Gupta’s Oakbay company was paying Bell Pottinger £100,000 a month for its lobby and PR advice. Bell Pottinger cancelled the contract in April.
Henderson issued an apology last month, fired Victoria Geoghegan, the partner leading the Gupta account, and suspended three other staff for the “inappropriate and offensive” social media campaign.
“Much of what has been alleged about our work is, we believe, not true – but enough of it is to be of deep concern,” he said. “We wish to issue a full, unequivocal and absolute apology to anyone impacted. These activities should never have been undertaken. We are deeply sorry that this happened.”
Mmusi Maimane, the leader of South Africa’s opposition Democratic Alliance party, told the PRCA disciplinary committee: “Bell Pottinger must face consequences for their collusion with the Guptas using a hateful and divisive campaign to divide South Africa along the lines of race.”
Maimane, who recently called an unsuccessful vote of no confidence in Zuma over allegations that he gave the Guptas’ companies preferential access to government contracts, called on the PRCA to take the strongest possible action against Bell Pottinger.
“This was a coordinated campaign to further Gupta financial interests‚ and ensure the captured ANC continued to provide lucrative contracts that lined Gupta pockets,” he said. “South Africa is not a political playground where international corporations can disregard ethics to turn a profit. Bell Pottinger’s unethical compliance in these projects is unacceptable and the Democratic Alliance has taken steps to ensure they are held to account.”
Henderson said he and other senior managers had been misled about the activities being carried out in South Africa. But Bell, who quit the firm last year in part because of concerns about working for the Guptas, said he had raised concerns with the company’s ethics committee.
Bell, who has previously represented the Pinochet Foundation, Syria’s first lady, Asma al-Assad, and the governments of Bahrain and Egypt, told the BBC that working for the Guptas was a “politically toxic contract” and warned that it could lose other clients.
Bell Pottinger has lost some of its biggest clients, including the South African investment bank Investec, the South African tourism board, the London-listed, African-focused miner Acacia, and Richemont, the luxury goods company that owns Cartier and Montblanc and is controlled by the South African billionaire Johann Rupert.
Maimane has written to other clients calling on them to drop the agency. “Though legal action is effective‚ corporations respond to their bottom line faster than they do to judges‚” he said.
