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HSBC

HSBC joins exodus from PR firm Bell Pottinger, that secretly tried to stir racial tensions in South Africa

‘We have used Bell Pottinger for specific projects in the past but will not be doing so in the future’

PUBLISHED : Wednesday, 06 September, 2017, 10:45am
UPDATED : Wednesday, 06 September, 2017, 9:34pm

Banking giant HSBC has joined firms that have cut ties with public relations firm Bell Pottinger, over a secret campaign to stir up racial tensions in South Africa.

The UK-based PR fim’s second-largest shareholder, Chime, also walked away from the business on Tuesday by writing off its investment.

HSBC, Britain’s biggest bank, said it would no longer use Bell Pottinger following the South Africa furore.

“We have used Bell Pottinger for specific projects in the past but will not be doing so in the future,” the bank said in a statement.

On Monday, the British PR trade body expelled Bell Pottinger from its ranks after the firm orchestrated a campaign to stir up anger about “white monopoly capital” and “economic apartheid” on behalf of one of South Africa’s wealthiest and most controversial families, the Guptas.

In addition to HSBC, Clydesdale Bank, the construction company Carillion, and UK broadband operator TalkTalk all revealed on Tuesday that they had stopped working with Bell Pottinger. Their departures brings the number of clients to have left the PR agency in the wake of the scandal to seven.

The billionaire Guptas have been accused of benefiting financially from their close links to Jacob Zuma, the South African President. Zuma’s son Duduzane has been a director of several Gupta-owned companies and worked for Oakbay, the business at the centre of the scandal. Both have previously denied such a relationship.

In July, the PR firm’s chief executive, James Henderson, offered an “unequivocable and absolute” apology for an “inappropriate and offensive” social media campaign. The firm’s largest shareholder, Henderson quit on Sunday.

Bell Pottinger investor Chime, co-owned by US investment firm Providence Equity Partners and Sir Martin Sorrell’s WPP group, has given up trying to sell its 27 per cent holding in the wake of the scandal.

“We no longer have a stake in Bell Pottinger,” confirmed a spokesman for Chime.

As Chime is a minority shareholder in the PR agency, its stake, which is thought to have been valued at about £5 million (US$6.5 million), will be written down as a non-cash charge on its balance sheet.

TalkTalk, one of the UK’s biggest broadband operators, had a contract with Bell Pottinger which ended earlier this year. The company is set to put out a tender for a new corporate PR and public affairs contract and it is understood that Bell Pottinger will not be asked to submit a bid.

Waitrose, which prides itself on its ethical stance and uses Bell Pottinger, would not say whether it will continue to employ the embattled agency. “We don’t comment on specific supplier relationships,” said a spokeswoman, who refused to elaborate further.

Lord Timothy Bell, who resigned last summer from the company he co-founded, told Newsnight he thought it was “almost certain” Bell Pottinger would not survive the scandal.

“I think that it is probably getting near the end, I mean you can try and rescue it but it won’t be very successful,” he said.