The issue of who to blame for the Gupta scandal is now being played out in full in South African politics. The issue for Bell Pottinger is who knew what when.
In the April 2017 announcement that Bell Pottinger was quitting the Oakbay contract, Henderson was robust, blaming negative comments on Twitter and saying that allegations that the firm had worked to stoke racial tensions in South Africa were ‘completely untrue’.
allegations continued, fuelled by a report that was published in July when a
South African opposition politician referred Bell Pottinger to the Public
Relations and Communications Association (PRCA) and the Chartered Institute of
Henderson responded to the fallout by firing Geoghegan and suspending partner Nick Lambert and two junior team members for ‘inappropriate and offensive’ activity.
He also hired law firm Herbert Smith Freehills to investigate Bell Pottinger’s actions on the Oakbay contract. It is believed that the law firm's initial report led to Henderson’s decision to suspend and fire colleagues.
Issuing an 'unequivocal apology,' Henderson stated: 'We have already been shown interim evidence which has dismayed us. Much of what has been alleged about our work is, we believe, not true. But enough of it is to be of deep concern. These activities should never have been undertaken.' One insider claims that ‘98 per cent’ of the work was uncontroversial.
Henderson maintains, however, that he was unaware of what his firm was doing on the Oakbay account, insisting that he took no direct part in the Oakbay contract, never met or communicated with the Guptas and devolved all responsibility for the contract to his account team.
He claims that the first time he knew of any problems was in March 2016 after Bell was rung by Richemont chairman Johann Rupert, who said he had concerns about the Guptas.
'That was the first time Tim mentioned it,' says a Bell Pottinger insider.
'After that, Henderson knew about Richemont's concerns but he didn't know that
any of the other clients had an issue until they resigned.'
Henderson sent an
email to defecting clients, asking if they would reverse their decision if Bell
Pottinger gave up the Oakbay account. However, he was told it was too late.
This view points a finger at Geoghegan, about whom Henderson had gushed that her 'energy, commitment and broad range of skills embody what we want' when promoting her to managing director of Bell Pottinger's financial and corporate division in December 2016.
Geoghagen, who is eight months pregnant, is said to have been horrified by vitriolic personal attacks on her that have appeared online and on social media.
One South African headline declared: 'From angel to pure evil: How UK PR Victoria Geoghagen got her claws into South Africa.' Another called her a 'news prostitute'. A third asked 'how evil mastermind Victoria Geoghegan sleeps at night'.
She is said to believe that she has been unfairly made a scapegoat of the Guptagate affair and is above all, a victim of the power struggle for Bell Pottinger between Henderson and Lord Bell.
Bell has been openly critical of Henderson, telling The Financial Times in July that Henderson ‘knew all about it from the very beginning,' stating: 'The account was one of the reasons I resigned from the company. The truth of it is self-evident. I told them not to accept the client in the first place. They ignored that.'
Bell and Henderson also differ over the nature of Bell's departure, which is
said to have taken two years to negotiate.
'Tim didn't want to leave,' discloses one source. ‘He was on £1 million a year as chairman but was in the twilight of his career and wasn't seen to be bringing enough work in.'
Henderson and Geoghegan both declined to be interviewed for this article while Bell did not return calls.
Some industry figures question Henderson’s oversight of the Oakbay contract. 'Alarm bells should have rung at the management board level long before all this became so public,' comments one.
'When one of your longest-serving clients calls you up and says they cannot
continue to work with you if you continue with a campaign, that should raise
concerns. There were lots of
warning signals received but Bell Pottinger continued to support the Gupta
brothers when it should have been asking whether it should be doing so.’
Henderson is said to
be exasperated by such criticism, believing that it was enough to have one of
his top operators in change. He feels that economic emancipation campaigns do
not have to be dark arts but can be done responsibly. He believes the problem
was that his team lost objectivity and perspective.
Does Bell Pottinger have a future? Much will depend on the Herbert Smith report. Some senior PR industry commentators believe Henderson will have to resign. The business may be sold, though Henderson and his fiancée Heather Kerzner, an ex-wife of South African casinos multi-millionaire Sol Kerzner, control 37 per cent of the equity.
John Sunnucks, who heads Bell Pottinger's financial services arm, has been reported to be mooting a buyout attempt. Experienced management may also need to be brought into the business to give it a fresh start, away from the problems of its legacy management, although insiders claim that Hugh Taggart, the managing director of Bell Pottinger’s 70 man practice Engage, is the frontrunner to take over. And the ‘Bell’ part of the company’s name is expected to be ditched.
'Bell Pottinger will survive,' insists one believer.' But it will be in a different form. It has to make radical changes.'
A more sceptical view is that this will be the end of an era. 'Bell Pottinger is not just finished in Africa because of this; it is finished everywhere,' one PR chief predicts. 'You can't expect to win new clients when you have just been shown to have been working against your own clients. Nobody wants to join a PR firm that does that.'
For now, the legacy is that Bell Pottinger lost substantially more in terms of business and reputation from the Gupta than it gained from the lucrative fees involved.
A company that made
its living for three decades from protecting the reputations of others failed
to safeguard its own.