Banking giant HSBC has become the latest firm to cut ties with British public relations agency Bell Pottinger after it was thrown out of an industry body for running a racially charged campaign in South Africa.
The firm is facing a growing backlash from clients and investors following stinging criticism of the campaign.
HSBC said it would no longer work with the firm, while fellow communications firm Chime confirmed it “no longer had a stake in Bell Pottinger” – writing-off the value of its 27% holding after failing to find a buyer.
At least four major clients, including Investec, are also understood to have ditched Bell Pottinger’s services over the racism row.
The agency’s future looks uncertain, with it confirming on Wednesday that it had hired accountancy firm BDO “to look at all options for the business including a possible sale”.
The firm’s troubles began when South Africa’s main opposition party, the Democratic Alliance (DA), complained about the PR company’s campaign for Oakbay Capital – an investment holding firm run by the billionaire Gupta family – which portrayed opponents of President Jacob Zuma as agents of “white monopoly capital” and coined slogans of “economic apartheid”.
Mr Zuma and the Guptas – accused of wielding undue political influence over the South African government – have always denied any wrongdoing in their relations.
An investigation by the UK’s Public Relations and Communications Association (PRCA) found the campaign was likely to “inflame racial discord” in the country.
The PRCA, which represents 400 businesses and 20,000 individuals, on Tuesday banned the London-based agency from its membership for at least five years – the harshest sanction in its history.
PRCA director general Francis Ingham condemned the firm’s work on the South Africa contract as “reprehensible”.
“The view of the PRCA board was that Bell Pottinger’s actions were deliberately intended to create exactly the result they did – stirring up racial hatred in a very sensitive area of the world,” he said.
In a statement, Bell Pottinger said it accepted there were lessons to be learned, but disputed “the basis on which the ruling was made”.
It said the South Africa campaign was not representative “of the way it works in general” and it would continue to abide by the PRCA’s code of ethics.