Bell Pottinger crisis deepens as major shareholder writes off investment
The crisis at Bell Pottinger has intensified after the PR firm's second biggest shareholder wrote off its investment in the company and it was ditched by a number of key UK clients.
Chime, an advertising firm, has abandoned an attempt to offload its 27% stake in Bell Pottinger and has instead written off its holding, raising further questions over the beleaguered company's future.
This followed claims that Bell Pottinger ran a "racially divisive" campaign in South Africa, and a flurry of clients abandoning the firm.
It is understood that Unite and Carillion pulled their business from Bell Pottinger as a direct result of the scandal.
It is also thought that Harry Potter publisher Bloomsbury is considering severing its relationship with the firm as it monitors the situation.
Investec and Richemont are among the other clients to have dumped Bell Pottinger over the scandal, with co-founder Lord Bell warning that the company will "almost certainly" fail to recover from the fallout.
The loss of the accounts follows a damning report by law firm Herbert Smith Freehills, which said Bell Pottinger's campaign for South Africa's Gupta family was likely to "inflame racial discord".
It resulted in the company being thrown out of the UK PR trade body on Monday.
The Public Relations and Communications Association (PRCA) imposed its most serious sanctions on the agency over its work for Oakbay Capital.
The PR firm cannot re-apply to join the PRCA for at least five years after it was found to have breached two clauses of the organisation's professional charter and two clauses of its code of conduct.
The trade association's professional practices committee found Bell Pottinger's campaign was "likely to inflame racial discord in South Africa and appears to have done exactly that".
For its part, Bell Pottinger has pledged to introduce a more formal review of client work which will help to "identify high-risk clients and high-risk mandates", update its training programme, redevelop its corporate policies, including for social media, and establish a new ethics committee.
It also plans to "engender a culture" where junior staff can more easily challenge the work of their superiors, which will be separate from its existing whistleblowing policy.