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PR firm Bell Pottinger collapses after racial-tensions scandal

[LONDON] Bell Pottinger LLP, the UK public-relations firm founded by an adviser to Margaret Thatcher and slammed for stoking racial tensions in South Africa, filed for administration.

Bell Pottinger named financial adviser BDO to oversee the process, the newly appointed accountant said in a statement on its website Tuesday. The PR company lost clients and staff over its controversial work for the Gupta family in South Africa and was expelled from the UK's PR trade body last week.

"Following an immediate assessment of the financial position, the administrators have made a number of redundancies," a BDO spokesman said. "The administrators are now working with the remaining partners and employees to seek an orderly transfer of Bell Pottinger's clients to other firms in order to protect and realize value for creditors."

Bell Pottinger, which made a profit of 11 million pounds (S$19.7 million) on revenues of 33 million pounds in 2015, was criticised by an industry body after an investigation found its work on behalf of the Gupta family had included a racially-divisive social media campaign.

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The company's actions "brought the industry into disrepute," the UK's Public Relations and Communications Association said.

London-based Bell Pottinger initially sought to sell itself, a move that failed amid the exodus of clients and staff. Executives at Bell Pottinger couldn't be reached for comment.

The company had attracted attention in the past for taking on controversial clients like former Chilean dictator Augusto Pinochet's foundation. According to a 2016 report by the Bureau of Investigative Journalism, a US-funded anti-Al-Qaeda propaganda campaign that Bell Pottinger carried out in Iraq included fake insurgent videos used to track those who accessed them.