Clients abandoning crisis-hit Bell Pottinger

South African President Jacob Zuma listens to a speech during the Dialogue of Emerging Market and Developing Countries in Xiamen in southeastern ChinaÕs Fujian Province

The Bell Pottinger co-founder was interviewed by BBC Newsnight's Kirsty Wark after the company was expelled from the Public Relations and Communications Association.

The bank, which previously enlisted Bell Pottinger in London for short-term media engagement campaigns, confirmed that it has stopped working with the firm.

"The view of the PRCA board was that Bell Pottinger's actions were deliberately meant to create exactly the result they did - stirring up racial hatred in a very sensitive area of the world", he said.

Other companies have also walked away from the PR firm.

HSBC and Carillion have said that they will no longer work with Bell Pottinger, though neither firm specified the reason why. Their departure brings the number of clients to have left the PR agency in the wake of the scandal to seven.

This week the UK's Public Relations and Communications (PRCA) imposed its harshest penalty possible on the public relations firm for campaigns it orchestrated for Oakbay Capital, a South African company owned by the brothers Atul, Ajay and Rajesh Gupta.

The Guptas have been accused of benefiting financially from their close links to Jacob Zuma, the South African president.

According to the email, Bell said that the trip had been a great success and that a deal had been put forward in which the firm would earn £100 000 (approx R17 million) per month plus costs to head the campaign.

The PRCA launched an investigation into Bell Pottinger following a complaint from South Africa's main opposition party, the Democratic Alliance (DA).

Chief executive James Henderson resigned on Sunday and the company said it would move quickly to appoint his replacement.

Due to the work it had done for Oakbay and the Gupta family, the PRCA announced that Bell Pottinger's membership had been terminated and the company has been banned for five years.

"It's probably nearing the end", said Bell, who formed the firm in the 1980s after advising Prime Minister Margaret Thatcher on media matters.

TalkTalk, one of the UK's biggest broadband operators, had a contract with Bell Pottinger which ended earlier this year.

Waitrose, which prides itself on its ethical stance, would not say whether it will definitely continue to employ the embattled agency. Richard Edelman yesterday described Bell Pottinger's expulsion from the PRCA as a "proud moment for the industry", while many senior PR figures have publicly applauded the decision. "We don't comment on specific supplier relationships", said a spokeswoman, who refused to elaborate further.

Cie Financiere Richemont, the luxury-goods company controlled by Johann Rupert, South Africa's richest man, ended a contract with Bell Pottinger a year ago. "It appears that Chime's co-owners, Providence Equity Partners and WPP Group, sense the reputation risk is not worth the relative small cost to write down their investment".

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