Bell Pottinger could be put into administration as soon as next week after its financial plight worsened in the wake of a scandal over its secret campaign to stir up racial tensions in South Africa.

The PR agency has asked accountancy firm BDO to find a buyer in a bid to evade closure, but one source close to the process said time was running out.

“They have days to close a deal, not weeks,” a source close to the sales process told the Guardian. “This is very much the same as a business going into receivership: they will be lucky to have until the end of next week – or face administration.”

Another source close to the situation said Bell Pottinger was “moving towards administration early next week”.

BDO has hastily set up a data room and has contacted prospective buyers but, given the damage the Bell Pottinger brand has taken from the South African scandal, it will be a tough task.



“Bell Pottinger is in discussions with BDO about a restructuring of the business,” said a spokesman for the agency, which was founded by Margaret Thatcher’s favourite PR adviser Lord Bell along with Piers Pottinger in 1987 and employs about 250 people.

Staff were told on Thursday that the company’s financial situation was so fragile that they could have their employment terminated immediately, according to Sky News.

The race to find a buyer comes as tobacco company Imperial Brands, owner of Gauloises, John Player and Winston, become the latest client to review its relationship with the agency.

The FTSE 100 firm – exactly the kind of client Bell Pottinger built its business on – has used the agency for two decades.

‘We have a long-standing relationship with our UK account team, none of whom were ever involved with the Oakbay account,” said a spokesman for the company. “Having said that, Bell Pottinger’s conduct in South Africa was clearly unacceptable and, as you would expect, we are therefore currently reviewing our relationship with them.”

The Public Relations and Communications Association, the industry’s trade association, this week banned the firm from membership for at least five years after investigating a complaint from South Africa’s main opposition party that the PR firm sought to stir up anger about “white monopoly capital” and the “economic apartheid” in South Africa.

The punishment from the PRCA was the most draconian it has ever handed down. Francis Ingham, the director general of the trade body, said Bell Pottinger had brought “the PR and communications industry into disrepute”.

Bell Pottinger was being paid £100,000 a month by Oakbay Capital, the holding company of the wealthy Gupta family, who 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 scandal has pushed clients to reconsider their use of Bell Pottinger. In all, almost a dozen clients have now parted ways with the agency including HSBC, Clydesdale, TalkTalk, construction group Carillion, Richemont, Investec and mining group Acacia along with Unite, the listed student accommodation group.

The scramble to find a buyer or other forms of finance is in part because of a £5m debt load partly built over payouts to Lord Bell, the co-founder who left last summer, and other top staff whose stakes in the company have been bought out.

James Henderson, the largest shareholder, resigned as chief executive over the weekend, just before the scale of the punishment from the PRCA became clear.

Earlier this week, the Guardian revealed that Bell Pottinger’s second largest client Chime, owned by US firm Providence and Sir Martin Sorrell’s WPP, handed back its 27% stake for free as the scandal engulfed the business. Chime had been attempting to sell the shareholding but decided to gift it to Bell Pottinger after failing to find a buyer and writing off the stake.

Some key figures left this week, including John Sunnucks, the chairman of its corporate and financial practice.