×

Troubled UK PR agency Bell Pottinger up for possible sale following South Africa scandal

British public relations agency Bell Pottinger could be sold following a scandal involving a campaign it ran for a business belonging to controversial South Africa-based family the Guptas.

The family are said to have close links with president Jacob Zuma, who has been involved in alleged corruption since taking office in 2009, and Bell Pottinger's campaign has been called "racially divisive."

It has hired accountancy firm BDO to look at possibilities. "I can confirm that we have hired BDO to look at all options for the business including a sale," a spokesperson for Bell Pottinger said in an email to CNBC.

A woman waves the South African flag during a demonstration in Pretoria, calling for president Jacob Zuma to resign, in April 2017
Marco Longari | Getty Images
A woman waves the South African flag during a demonstration in Pretoria, calling for president Jacob Zuma to resign, in April 2017

Bell Pottinger has been defending its reputation over a number of weeks due to the scandal. A report by law firm Herbert Smith Freehills, commissioned by the company and released Monday, stated that the agency's work for Gupta business Oakbay Investments was "potentially racially divisive" and "created in breach of relevant ethical principles."

Bell Pottinger's Chief Executive James Henderson resigned Monday, as trade body the Public Relations Communications Association expelled the company from its membership. Henderson sought to distance himself from the Oakbay account, saying in a statement he "neither initiated nor was involved" in it.

Oakbay was a lucrative account for Bell Pottinger, worth £100,000 ($130,000) a month, according to an email sent by former CEO Tim Bell who spoke on the BBC's "Newsnight" program Monday. Although Bell admitted to meeting the members of the Gupta family in January 2016, he told presenter Kirsty Wark: "I had nothing to do with getting this account."

Bell left the company in August 2016, partly due to the association with the Guptas.

A BDO spokesperson said in a statement emailed to CNBC: "Due to reasons of confidentiality we do not comment on business matters of this nature."

Follow CNBC International on Twitter and Facebook.