Indian businessmen Ajay and Atul Gupta, and Duduzane Zuma , their business partner and the son of President Jacob Zuma, are shown in this 2011 file photo. The controversial Gupta brothers have extensive ties to South African President Jacob Zuma and his family.Gallo Images
Bell Pottinger, the famed London-based public relations agency that has burnished the image of controversial regimes worldwide, has been expelled from an industry group for "inflaming racial discord" in South Africa.
The decision to terminate Bell Pottinger's membership for a minimum of five years is the toughest sanction that can be taken by the Public Relations and Communications Association, a British-based group that represents more than 20,000 people in 55 countries.
"Bell Pottinger has brought the PR and communications industry into disrepute with its actions, and it has received the harshest possible sanctions," said a statement released on Monday by Francis Ingham, director general of the association.
"The PRCA has never before passed down such a damning indictment of an agency's behaviour," he said.
After a complaint from an opposition political party in South Africa, the association investigated Bell Pottinger's racially divisive campaign on behalf of the Gupta family, the powerful tycoons who enjoy close connections to South African President Jacob Zuma and his family.
The media campaign launched by Bell Pottinger on behalf of the Guptas "was by any reasonable standard of judgement likely to inflame racial discord in South Africa and appears to have done exactly that," the PRCA said.
The investigation concluded that Bell Pottinger had breached four separate clauses of the industry's professional code of conduct.
James Henderson, the agency's chief executive officer, resigned on the weekend as the firm prepared to release a law firm's independent review of its South African campaign.
The law firm's review, released on Monday, confirmed that Bell Pottinger had created a "potentially racially divisive" media campaign in South Africa. It said the agency had behaved unethically and had misled or undermined journalists who were asking questions about the campaign. The review was conducted by international law firm Herbert Smith Freehills.
Bell Pottinger has already apologized for its role in an expensive and inflammatory campaign against "white monopoly capital" on behalf of the controversial Gupta family. The agency dismissed or suspended four staff in July when it apologized for what it admitted was "offensive" and unethical behaviour.
The London-based agency, founded by Margaret Thatcher's former spin doctor, has gained notoriety for polishing the images of repressive regimes and autocrats around the world, from Syria and Saudi Arabia to Belarus and Chile. But it got into serious trouble for its work in South Africa, where it is accused of fuelling racial hatred in a country struggling to heal apartheid's wounds.
President Zuma has survived repeated challenges of his relationship with the Guptas over the years, but there is mounting scrutiny of the international companies – including some Canadian ones – that have done business with the Guptas, who run companies in the computer, mining, media, air travel and energy industries.
Testimony in a South African inquiry has alleged the Guptas offered bribes to a cabinet minister, controlled the appointment of other cabinet ministers and profited from lucrative deals with state-owned enterprises. They even used their Zuma connections to obtain a military airfield so that they could bypass the normal immigration controls for a planeload of wedding guests.
The Guptas, who have a business partnership with Mr. Zuma's son Duduzane, hired the British PR agency early last year through their corporate vehicle, Oakbay, for a monthly fee of about $170,000.
A cache of leaked e-mails has shown Bell Pottinger worked with the Guptas and Duduzane Zuma to create a divisive strategy that exploited South Africa's racial tensions to distract attention from the Guptas and tarnish their opponents. The campaign alleged that "economic apartheid" and "white monopoly capital" held a "stranglehold" on the economy.
In one leaked e-mail, a Bell Pottinger executive praised a youth leader in Mr. Zuma's ruling party who had threatened "civil war" against an opposition party.