A leading City PR firm at the centre of a scandal over stirring up racial tensions in South Africa on behalf of one of the country’s most powerful families, created a potentially racially divisive campaign, according to an independent report.

The report into the events at Bell Pottinger, carried out by Herbert Smith Freehills law firm, was published a day after the PR group’s chief executive, James Henderson, stood down over the scandal.

It also found that senior management failed to put in place adequate policies for handling such a campaign and missed opportunities to crack down on the PR disaster.



Bell Pottinger, which faces serious disciplinary action from the UK’s PR trade body, called in the law firm to investigate the scandal to try to restore the tattered reputation of one of the best known names in PR.



South Africa’s main opposition party, the Democratic Alliance, which is popular with many white South Africans, accused the the PR firm of orchestrating a campaign to exploit racial tensions on behalf of Oakbay Capital, the holding company of the Gupta family.

Bell Pottinger, which was paid £100,000 a month by the Gupta group until resigning the account in April as the scandal broke, is accused of orchestrating the creation of fake Twitter accounts to target prominent white businesspeople in South Africa.

“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,” said the law firm.

The firm is accused of stirring up anger about “white monopoly capital” and the “economic apartheid” to draw attention away from the controversial Guptas, who run a media to mining conglomerate and have been accused of benefiting financially from their close links to the South African president, Jacob Zuma. Both have previously denied such a relationship.

The report also found the PR firm employed other unethical tactics as part of the campaign.

“We have seen evidence that the Bell Pottinger account team used other tactics in relation to the economic emancipation campaign which arguably breached the relevant ethical principles‚ including taking steps which might mislead or undermine journalists who were asking questions in relation to the campaign,” the report says.

In July, Henderson issued an “unequivocal and absolute” apology for the “inappropriate and offensive” social media campaign; a U-turn from the company’s stance when it resigned the Oakbay business in April, when it said it had been the victim of a politically motivated smear campaign involving a “number of totally false and damaging accusations”.

The report said senior management did not know about the campaign, but that they had failed to put in place the appropriate safeguards that would have alerted them to what staff were doing.

“In such circumstances Bell Pottinger ought to have exercised extreme care and should have closely scrutinised the creation of content for the campaign,” the report says.

“This does not appear to have happened. There were a series of opportunities for certain members of senior management to discover these matters which were missed. In addition, members of senior management with day-to-day supervisory responsibility failed to put in place policies and procedures to minimise the risks associated with this account, including any formal process for the ongoing monitoring of the account and the work being done.”

The report argued that it was not a breach of “relevant ethical principles” to have taken on the “economic emancipation” campaign, but Bell Pottinger’s senior management “should have known that the campaign was at risk of causing offence, including on grounds of race”.

Henderson, the largest shareholder in Bell Pottinger, said in a statement: “Although I neither initiated nor was involved in the Oakbay work, I accept that as CEO, I have ultimate executive responsibility for Bell Pottinger.”

The PR firm made a number of pledges to bolster its corporate practices including creating an ethics committee, further training for employees in social media engagement, and “engender a culture whereby junior employees at Bell Pottinger feel able to challenge work with which they feel uncomfortable”.