(Bloomberg) -- Bell Pottinger LLP Chief Executive Officer James Henderson resigned from the U.K. public relations firm after a report found that he should have more closely monitored a racially sensitive campaign carried out on behalf of the Gupta family South Africa.
“I recognize the business requires a change of leadership to fix the problems of the past,” Henderson said in an emailed statement on Monday. While he wasn't directly involved in work for the Guptas' Oakbay Investments Pty Ltd., the CEO had “ultimate responsibility,” he said.
Henderson's departure came as London-based Bell Pottinger released a summary of an external report into its work for the Guptas, who are friends with President Jacob Zuma and are in business with his son. The review by law firm Herbert Smith Freehills LLP found that the company conducted a social-media campaign aimed at highlighting economic inequality in South Africa along racial grounds, and that senior management didn't pay enough attention to what the team assigned to Oakbay were doing.
“Members of Bell Pottinger's senior management should have known the campaign was at risk of causing offense, including on grounds of race,” Herbert Smith Freehills said in an emailed statement from the public relations firm. They “failed to put in place policies and procedures to minimize the risks associated with this account,” it said.
Political Influence
A report by South Africa's graft ombudsman last year implied that the Gupta family used their political connections to influence cabinet appointments and the issuing of state contracts. Zuma and the Guptas deny the allegations, which have since intensified due a series of leaked emails published by local media.
Bell Pottinger worked for the Guptas between January 2016 and April of this year. In July, the company fired the lead partner on the Oakbay account and suspended two others after reviewing Herbert Smith Freehill's initial findings.
The Democratic Alliance, South Africa's biggest opposition party, filed a complaint against Bell Pottinger with the U.K.'s Public Relations & Communications Association, which found the firm guilty of breaching its code of conduct. The industry body is due to publish its final ruling on Tuesday, following an appeal by the company.
Bell Pottinger has put in place remedies to avoid similar situations happening in the future, it said. These include improving its ability to monitor ongoing client work, more training for employees and the establishment of an ethics committee, it said.
To contact the reporter on this story: John Bowker in Johannesburg at jbowker2@bloomberg.net.
To contact the editors responsible for this story: Tara Patel at tpatel2@bloomberg.net, Rene Vollgraaff, Gordon Bell
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