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There is no future for PR agency Bell Pottinger after South Africa scandal, says founder Tim Bell

Lord Tim Bell at the Paddy Power Political Book Awards in London in 2015
David M. Benett | Getty Images

One of the founders of controversial British public relations agency Bell Pottinger has said that the company is unlikely to survive in the wake of its association with South African president Jacob Zuma and a campaign that has been accused of portraying his opponents as agents of "white monopoly capital."

Speaking on the BBC's Newsnight program Monday, former CEO Tim Bell said the company would "almost certainly" not be able to survive the scandal. Asked by presenter Kirsty Wark whether the company could go on he stated: "I think it probably is getting near the end, yes. You can try and rescue it but it won't be very successful."

Bell resigned from his agency in August 2016 partly due to "the Gupta account," he said on Newsnight, referring to Oakbay Investments, the company owned by the Indian-born family that operates in South Africa and is alleged to have close links with Zuma's ANC party. Bell Pottinger has previously worked for the Pinochet Foundation, Syria's first lady Asma al-Assad and FW de Klerk.

Lord Tim Bell at the Paddy Power Political Book Awards in London in 2015
David M. Benett | Getty Images

This morning the agency was expelled from trade body the Public Relations and Communications Association following an investigation after a complaint from the opposition Democratic Alliance party.

This follows weeks of controversy surrounding the agency which was hired by Oakbay Investments in early 2016. In July 2017 Bell Pottinger's then chief executive James Henderson issued an online statement saying it had hired law firm Herbert Smith Freehills to review its work with Oakbay following accusations that it had "supported or aided campaigns to stir up racial division in South Africa."

Henderson's statement added that it had fired a lead partner, resigned the account and apologized, saying: "These activities should never have been undertaken."

Herbert Smith Freehills' report, published Monday and seen by CNBC, confirmed that Bell Pottinger was hired by Oakbay to promote "a narrative around the existence of 'economic apartheid' and the need for more 'economic emancipation'."

Businessmen Ajay and Atul Gupta with Duduzane Zuma, son of South Africa's president Jacob Zuma in Johannesburg in 2011
Gallo Images | Getty Images

It added that the PR campaign was potentially racially divisive and offensive, stating: "Certain material that we have seen that was created for the campaign was negative or targeted towards wealthy white South African individuals or corporates and/or was potentially racially divisive and/or potentially offensive and was created in breach of relevant ethical principles."

The report confirmed that the term "white monopoly capital" was used by the Bell Pottinger account team on occasion but that there was no evidence that the agency invented the term.

This report caused the resignation of Bell Pottinger CEO Henderson on Monday, who said in a statement emailed to CNBC by the agency: "Having read these findings, I recognise the business requires a change of leadership to fix the problems of the past and to move forward. Although I neither initiated nor was involved in the Oakbay work, I accept that as CEO, I have ultimate executive responsibility for Bell Pottinger."

What's happening in Zuma's South Africa?

Henderson added that he felt "deeply let down by the colleagues who misled me," in contrast to Bell's comments on Newsnight when he stated: "Of course James Henderson is to blame and of course he should have resigned."

Bell denied directly managing the Oakbay account, even though he admitted to Wark that he had had a long meeting with the Guptas in South Africa in January 2016 to discuss the business, worth £100,000 ($130,000) a month to the agency. Bell suggested that the agency could not take on the work due to a conflict of interest.

When contacted by Tuesday, Bell Pottinger said in an email: "We are not providing any further comment on the matter at the moment and will not be commenting on spurious speculation by Lord Bell."

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Lord Tim Bell at the Paddy Power Political Book Awards in London in 2015
David M. Benett | Getty Images