Bell Pottinger Middle East plans management buyout

Atul Gupta is depicted on a placard in South Africa

The directors of Bell Pottinger Middle East (BPME), based in Abu Dhabi and Dubai, have announced the agency is in discussions to formalise a separation from its current owner Bell Pottinger Private Limited. This follows the news that Bell Pottinger Private Limited in the UK is likely to be put into administration. In a statement, the regional agency said: “As a separate legal entity, BPME is not part of these proceedings and is therefore in a position to determine its own destiny.”

BPME has been at pains to point out that at no point were its UAE directors ever involved in the winning or servicing of the Oakbay account in South Africa which has led to the  demise of the UK business. It said: “Indeed, BPME’s UAE directors actually rejected the opportunity to work on the account. This reinforces BPME’s ability and intention to continue to trade under its own banner as a separate entity.”

The directors of BPME are currently working on a proposal with the administrators of Bell Pottinger Private Limited in the UK, which would see the separation of BPME formalised and the ownership of the business transferred to its management.

On Friday, Bell Pottinger co-founder Piers Pottinger revealed he was leading a buyout of the agency’s Singapore-based Asian operations. The new Asian agency will be called Klareco Communications. “Klareco” means “clarity” in Esperanto.

UK trade organisation The Public Relations and Communications Association (PRCA) announced last Tuesday that it was expelling Bell Pottinger following an investigation into its work for South African company Oakbay Capital. The investigation followed a complaint from the Democratic Alliance, South Africa’s main opposition party. Bell Pottinger will not be eligible to reapply for corporate membership of PRCA for a minimum period of five years.

Oakbay is the holding company of South Africa’s powerful Gupta family, close allies of beleagured President Jacob Zuma. The agency had been paid £100,000 a month to stir up racial tension over “white monopoly capital” and “economic apartheid”.

Francis Ingham PRCA director general, said: “Bell Pottinger has brought the PR and communications industry into disrepute with its actions, and it has received the harshest possible sanctions. The PRCA has never before passed down such a damning indictment of an agency’s behaviour. This outcome reflects the huge importance that the PRCA places on the protection of ethical standards in the business of PR and communications.”

On Wednesday it emerged that the agency’s largest shareholder, Chime Communications, had handed back its 27 per cent stake, apparently without money changing hands. The stake was believed to be worth about £5m.

BPME has also announced that Amy Piek has been promoted to director. The agency said: “Amy has worked in the Middle East for more than three years and is a supremely talented and experienced operator. She has played an instrumental role in building the firm’s Financial Communications & Investor Relations practice.”

Archie Berens, managing director of BPME, Middle East, said: “This is an extremely exciting opportunity for us.  As an independent and financially secure business with a strong and experienced team in charge of its own destiny, it will now be open to us to consider a whole range of options.  Our company has a long and proud tradition of working in the Middle East and it is now up to us to continue to build on that.  With my fellow directors Tim Falconer and Amy Piek, I cannot wait to get started on the next stage of the journey.  We are especially pleased to have been able to promote Amy, who has thoroughly deserved this and has a key role to play in our future.”

Tim Falconer, also managing director BPME, Dubai, added: “The scale of the opportunity ahead of us is significant, and we are also receiving enquiries from a wide range of potential investors, which we will consider on their merits. The injection of fresh capital would enable us to make our business even stronger, through the acquisition of fresh talent and the addition of more services, especially in the digital arena. Between all three directors of BPME we have over 15 years’ experience in the Middle East, proof of our belief in and commitment to the region. Our business in the region remains strong and we are focused on continuing to deliver exceptional work on behalf of our clients.”