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Bell Pottinger dumped by PR association, HSBC, over SA campaign

The expulsion was for a minimum of five years, after which the firm could reapply – the harshest sanction possible.
Picture: Bloomberg

PR agency Bell Pottinger lost its contract with banking giant HSBC and saw its second-biggest shareholder walk away on Tuesday after it was thrown out of an industry body for running a racially-charged campaign in South Africa.

The firm, which provides crisis management to governments and corporations, is now caught up in a scandal of its own because of its campaign, seen as exploiting sensitive race relations to support President Jacob Zuma and his ruling party.

Clients are now distancing themselves following its expulsion from the Public Relations and Communications Association (PRCA) for work the body described as “reprehensible”.

HSBC said it would no longer work with the firm following the news, while the Bank of Ireland said it was also reviewing their relationship.

Bell Pottinger’s second-largest shareholder, marketing agency Chime, walked away from the firm after giving up on trying to sell its stake, valued at around 5 million pounds ($6.51 million) and worth around 25% of the company.

Chime instead wrote off its investment and handed its holding back. “We can confirm that we no longer have a stake in Bell Pottinger,” a Chime spokesman said in a statement.

Clients South African investment bank Investec, mining company Acacia, luxury goods firm Richemont, UK construction company Carillion and smaller UK bank CYBG have also dropped their Bell Pottinger accounts recently.

The firm’s troubles began when South Africa’s main opposition party, the Democratic Alliance, complained to the PRCA that Bell Pottinger’s campaign was trying to “divide and conquer” the South African public in order to keep Zuma and his party in power.

The campaign portrayed opponents of Zuma as agents of “white monopoly capital”, with slogans referring to “economic apartheid”. These gained traction in a country where the white minority still wields disproportionate economic power, two decades after the end of apartheid.

The PRCA, which represents 400 businesses and 20,000 individuals, said the firm had purposely played on frayed race relations.

“The view of the PRCA board was that Bell Pottinger’s actions were deliberately intended to create exactly the result they did — stirring up racial hatred in a very sensitive area of the world,” Francis Ingham, PRCA director general, said.

Bell Pottinger was paid 100,000 pounds ($129,000) a month by Oakbay, the holding company of the Indian-born Gupta family, which has been accused of using its closeness to Zuma to win government contracts. Zuma and the Guptas deny any wrongdoing.

UNPRECEDENTED STEP

The expulsion came into effect on Tuesday for a minimum of five years, after which the firm can reapply. It is the harshest sanction possible and unprecedented for such a prominent member.

In a statement, Bell Pottinger said it accepted there were lessons to be learned from its South Africa campaign but disputed “the basis on which the (PRCA) ruling was made”.

It said it would continue to abide by the PRCA’s code of ethics.

While Bell Pottinger can continue to operate, the ruling will take its toll in an industry that trades on reputation.

In July, the firm’s chief executive James Henderson issued an “unequivocal and absolute” apology to anyone affected, fired the lead partner involved in the campaign and suspended another partner and two other employees.

It also commissioned an independent report by law firm Herbert Smith Freehills, which found some of the campaign’s material was potentially racially divisive and offensive, but rejected allegations that the company backed so-called Twitterbots to artificially amplify apparent public support.

On Monday, after reading the independent report, Henderson resigned. He said while he had ultimate responsibility for Bell Pottinger, he had been “misled” over the campaign by colleagues.

Tim Bell, co-founder of Bell Pottinger and the PR veteran who made his name by advising Britain’s Margaret Thatcher, said it was “close to the end” for the agency.

He said one reason he resigned as chairman of the firm in August 2016 was because of its work in South Africa — although he had played a part in securing the Oakbay account.

“It was inevitable, and I’m not surprised,” he said of the PRCA expulsion. “I think it’s very sad that something that I ran for years and years has been destroyed in less than a year,” he told Reuters by telephone. 

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South African’s should file international legal action based on SA law related to conduct and hate speech.

Well if Penny Sparrow can be fined R150k and have to undertake social community service I can only think what fine the Human Rights Council should levy on them. And the Directors should be made to do community service in the communities most affected by racial tension!

Gil, that would be in white communities.

What you sow so shall you reap!!
They are now out of the way for our elections and so are many others as they look at the fall out. The racial card of the anc (another new corruption) cannot be played without consequences for someone!! Interesting times !!

Next stop – Kapsch, the granddaddy of the corrupt etoll sanral fiasco.

Disgraceful !!! At least the top guy resigned, if only we had that sorta of practise in S.A !!

And what happen to the client that give the instruction? And the president that utter the slogan in parliament? Surely the president could not think out the phrase.The fact that he used it implicate that he was aware of the campaign.

The damage has been done as they intended. the black hatred on white in SA is at a high, it will take years to improve.

End of comments.

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