Disgraced PR firm Bell Pottinger on brink of administration

The disgraced public relations firm Bell Pottinger is on the brink of collapsing into administration, just days after controversial work for a South African client led to its expulsion from its industry association.

Sky News understands that executives at Bell Pottinger briefed staff on Thursday afternoon that the company's financial position had become parlous and that they could choose to terminate their employment immediately.

Sources said the agency - for decades a stalwart of the international PR scene - could formally appoint administrators as soon as next week.

BDO, the accountancy firm, is likely to handle the administration if a rescue buyer is not found within the next few days.

The calamitous decline of Bell Pottinger would come in the wake of an exodus of clients including Carillion (Frankfurt: 924047 - news) , the construction firm, and CYBG (Frankfurt: 42YA.F - news) , the banking group, as well as senior staff.

The crisis has been triggered by Bell Pottinger's work for a wealthy South African family, which involved a campaign deemed by an independent legal report to have stoked racial tensions in the country.

The Public Relations and Communications Association said this week that Bell Pottinger had breached its ethical code and expelled it for five years.

It was unclear on Thursday how long the roughly 200 employees of Bell Pottinger would continue to be paid for, but one source said that they had been informed that they would only be paid up until their departure date from the firm.

James Henderson, the former chief executive, resigned late last week, saying he was accountable for the failings in Bell Pottinger's work for the Guptas but that he had not been aware of the actions of colleagues.

Lord Bell, the co-founder of the firm and favoured PR man of Baroness Thatcher during her tenure as the Conservative Party leader, had said that the crisis meant it was "curtains" for the agency.

Insiders said that if administrators were appointed, they were likely to attempt to sell teams of PR executives and their client contracts to rival PR firms.

John Sunnucks, who quit this week as head of its financial PR unit, is said to have teamed up with Tim Collins, chairman of its political practice, to launch a new communications outfit.

Bell Pottinger declined to comment.