Bell Pottinger, a UK-based PR firm, had a remarkable rise to fame in the 1990s, thanks to its innovative approach and charismatic founder, Lord Tim Bell.
The firm's success was largely due to its ability to capitalize on the growing demand for PR services in the 1990s.
Bell Pottinger's clients included high-profile names such as Margaret Thatcher and Rupert Murdoch, which helped to establish the firm's reputation as a powerhouse in the industry.
The firm's success was short-lived, however, as it faced severe criticism and backlash in 2017 for its role in a racial stereotyping scandal involving a South African company.
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History of Bell Pottinger
Bell Pottinger was a British public relations company founded in 1988 by Lord Tim Bell.
The company was initially known for its work in the field of public relations, particularly in the area of crisis communications.
One of its earliest successes was in 1990, when it helped to rebrand the Conservative Party for the UK general election.
Bell Pottinger's reputation was cemented when it was appointed to handle the press relations for the Conservative Party's 1992 general election campaign.
The company's expertise in crisis communications was put to the test in 1993, when it helped to manage the press fallout from the Conservative Party's "Black Wednesday" financial crisis.
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Founding
Bell Pottinger was founded in 1986 by Lord Tim Bell, a renowned British public relations consultant.
The company started as a small, boutique PR firm with a focus on crisis management and reputation repair.
Lord Bell had a successful career in politics, serving as the director of communications for Margaret Thatcher's 1987 election campaign.
This experience laid the groundwork for Bell Pottinger's future success in politics and public relations.
The company's early success was largely driven by its innovative approach to PR, which emphasized the importance of storytelling and narrative development.
This approach helped Bell Pottinger build a reputation as a creative and effective PR firm.
In the early days, Bell Pottinger's client list included a range of high-profile individuals and organizations, including politicians, business leaders, and celebrities.
The company's expertise in crisis management and reputation repair proved particularly valuable in these cases.
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Early Success
Bell Pottinger was founded in 1986 by Lord Tim Bell and James Henderson.
The agency's early success was largely due to its focus on crisis communications and reputation management.
In the late 1980s, Bell Pottinger landed its first major client, the British government, to help with the aftermath of the Chernobyl nuclear disaster.
The agency's work on the Chernobyl crisis earned it a reputation as a go-to firm for handling high-profile reputational issues.
Bell Pottinger's team worked tirelessly to manage the flow of information and mitigate the damage to the government's reputation.
The agency's expertise in crisis communications was further showcased in 1992 when it handled the fallout from the Black Wednesday economic crisis in the UK.
What Was Happening in South Africa?
In the early 2000s, South Africa was still reeling from the aftermath of apartheid, a system of institutionalized racial segregation that had been in place for decades.
The country was in a state of transition, with the African National Congress (ANC) leading the charge towards democracy and equality.
Nelson Mandela, a key figure in the fight against apartheid, was now the President of South Africa, working to rebuild the country and promote reconciliation.
The economy was also undergoing significant changes, with a growing middle class and a shift towards a more market-based economy.
Bell Pottinger was well-positioned to capitalize on these changes, with a strong understanding of the country's complex politics and a reputation for innovative marketing campaigns.
In 2009, the company opened an office in Johannesburg, marking a significant expansion into the African market.
The ANC's leadership, including President Jacob Zuma, would later become embroiled in a scandal involving Bell Pottinger's PR services, which would have far-reaching consequences for the company.
Controversies and Criticisms
Bell Pottinger has faced significant criticism for its reputation laundering practices. The company's executives boasted of their techniques to undercover reporters, referring to them as "dark arts". This suggests a lack of transparency and accountability in their work.
In 2011, a front-page story in The Independent exposed Bell Pottinger's involvement in writing a speech for the Sri Lankan President to the United Nations, which downplayed military action against Tamil Tiger separatists as "humanitarian". This is a clear example of the company's willingness to shape public perception for its clients.
Bell Pottinger's actions have been widely condemned, with the Public Relations and Communications Association (PRCA) expelling the company in 2017. This is the most serious sanction the PRCA can take, and it follows an investigation and appeal.
Exposed Plans
Bell Pottinger's executives were caught on camera boasting about their reputation laundering techniques for countries accused of human rights violations.
The company's executives referred to these tactics as "dark arts", implying a sense of secrecy and manipulation.
They claimed to have written a key speech given by the Sri Lankan President to the United Nations, which described military action against Tamil Tiger separatists as "humanitarian".
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A team of Bell Pottinger employees worked directly in the President's office to craft the speech, which was well-received by the international community.
The company's chairman, David Wilson, proudly stated that their team's work went a long way in shaping the country's direction.
This shocking revelation raises serious questions about the ethics and accountability of companies like Bell Pottinger, who seem to prioritize their clients' interests over human rights and dignity.
Legal Action
Legal action was taken against former Bell Pottinger directors for not disclosing the scale of the problem in South Africa, which allegedly affected shareholder participation in a share buy-back in early 2017.
Several senior staff lost substantial sums to settle tax bills, with up to 15 partners said to have lost over £1m.
The company's liquidator, BDO, demanded around £4m from 40 former partners in October 2018, with Henderson asked to repay £400,000.
BDO threatened to sue former partners for their involvement in the Oakbay project, which breached partnership agreements.
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By October 2019, 21 former partners had repaid £468,000, but former CEO James Henderson disputed the amount requested by BDO.
Bell Pottinger's creditors, including Lloyds Bank owed £5.1m, were also owed BDO fees, which totalled £1.2m by October 2019.
In July 2020, former partners including Henderson faced potential disqualification from acting as company directors by the Insolvency Service.
In November 2020, liquidators were pursuing an unnamed partner for an additional sum, alleging breach of contract and "significant and related excess drawings".
Lambert and Geoghegan failed in a legal action to avoid being banned from acting as company directors in March 2021.
The Insolvency Service dropped its case against Henderson, Geoghegan, and Lambert in March 2023.
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Doi
Bell Pottinger's reputation has taken a massive hit, with the boss resigning, clients walking out, and the firm being expelled from the Public Relations and Communications Association (PRCA).
The PRCA's expulsion is the most serious sanction it can take, following an investigation, a provisional ruling, and an appeal. Bell Pottinger cannot rejoin the PRCA for at least five years.
Bell Pottinger was founded in 1987 by Sir Tim (now Lord) Bell, who became one of the biggest names in PR after advising former British prime minister Margaret Thatcher on her presentational style.
The firm has a history of taking on controversial clients, including former South African president FW de Klerk, Asma al-Assad, and Oscar Pistorius after he was accused of murder.
Lord Bell himself resigned from the company last year, and in an interview with the BBC's Newsnight, he said this latest episode was "almost certainly" the end.
South Africa's opposition Democratic Alliance accused Bell Pottinger of a "hateful and divisive campaign to divide South Africa along the lines of race".
Britain's biggest bank, HSBC, has said it would no longer use Bell Pottinger, and other clients, including a Swiss luxury company and a South African investment group, have also reportedly dropped the firm.
The damage to Bell Pottinger's reputation is immense, with the firm's actions creating a bad reputation through the very act of communication, rather than helping a client with a bad reputation.
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Impact on the Firm
Bell Pottinger's closure had a significant impact on the firm, with around 180 partners and employees losing their jobs in addition to those who had already left due to the South African scandal.
Staff were told that the firm could go into administration as early as 15 September 2017, but it ultimately happened on 12 September. This was a devastating blow to those who remained with the company.
The firm's financial struggles were evident in its financial reports, showing a net loss of £572,000 on a group turnover of £37.5m in 2016.
Closure
Bell Pottinger's closure was a direct result of the damaging South Africa scandal. Lord Bell, a founder of the firm, believed it was unlikely the company could survive.
Staff were told that the firm could go into administration by 15 September 2017, but it actually happened on 12 September. This meant that around 180 partners and employees lost their jobs.
BDO's efforts to retain value in the firm included seeking fees from rival companies if senior personnel left with clients. This was a desperate attempt to salvage something from the wreckage.
By 25 September, the number of partners at Bell Pottinger had dwindled from 40 to just 10-15. Potential buyers were deterred by the firm's high levels of debt.
The firm had £15.7m-worth of liabilities at the end of August, including a £6.8m loan from a UK clearing bank. This made it almost impossible to find a buyer.
As a result of the administration, legal firm Herbert Smith Freehills was owed nearly £1m.
Former Employees
After Bell Pottinger's collapse, many of its former employees went on to start their own businesses or join other firms.
In October 2017, 19 former staff members joined a new unit within London public affairs firm Pagefield.
Senior partners John Sunnucks and Tim Collins set up a new business called Vico Partners, and Alex Bloxham and Jamie Lyons joined MHP.
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A further five ex-Bell Pottinger staff joined Pagefield by the end of October, with others going to agencies including FleishmanHillard Fishburn, FTI Consulting, Lansons and Tulchan Communications.
The company's regional operations in the Far East and Middle East both split away from the parent firm.
The 50-strong Far East business headquartered in Singapore was rebranded as Klareco Communications (Klareco means "clarity" in Esperanto).
Former chairman and co-founder Piers Pottinger resigned his position with immediate effect.
In November 2017, City AM reported that BPME had been acquired by London-based Hanover Communications, adding 14 staff.
In January 2017, former Bell Pottinger London partner Jonathan Lehrle founded Sans Frontieres Associates.
Former Bell Pottinger staff Jerome Hasler and Philip Peck joined him.
In March 2019, Geoghegan joined risk management and corporate communications consultancy Thoburns.
In June 2020, Consulum, founded by two former Bell Pottinger employees, Tim Ryan and Matthew Gunther Bushell, was appointed by the Hong Kong government to counter negative coverage of the territory in the international media.
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Publicity and Reputation
The concept of all publicity being good publicity is a myth that's been debunked by the Bell Pottinger scandal. In reality, trashing your own reputation can make it difficult to protect someone else's.
South Africa is a prime example of this, where the country's reputation was severely damaged by the actions of Bell Pottinger. The firm's involvement in a racist campaign against the Gupta family's opponents in the country's media and politics did not go unnoticed.
Jacob Zuma's presidency was also marred by controversy, which further eroded the country's reputation. Bell Pottinger's work for Zuma's government, including a campaign to discredit his opponents, was a major contributor to this.
Protecting someone else's reputation is a key part of public relations work, but it's a hard sell when you've trashed your own.
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