LONDON — Bell Pottinger has collapsed into administration following the stunning scandal triggered by its work for South Africa's Gupta family. 

The development, which was revealed last week as shareholders, clients and staff deserted the embattled agency, was formalised by the appointment of BDO as administrators, effective today. Bell Pottinger's implosion dominated the front pages of the media last week, an unprecedented phenomenon for a PR firm.

Bell Pottinger was plunged into a fight for its survival after it was expelled from the PRCA for stoking racial tensions in South Africa. One day earlier, an internal report by Herbert Smith Freehills found the firm's work for Gupta conglomerate Oakbay Capital was "racially divisive", accounting for the resignation of CEO James Henderson, one of the firm's key shareholders.

Initially, the firm attempted to appoint new management and find a buyer, but the exodus of clients and senior staff scuppered those efforts. By late last week, as its Asian and Middle Eastern operations severed ties, administration appeared certain. 

"Following an immediate assessment of the financial position, the administrators have made a number of redundancies," said a BDO spokesperson. "The administrators are now working with the remaining partners and employees to seek an orderly transfer of Bell Pottinger’s clients to other firms in order to protect and realise value for creditors. We have taken appropriate steps to preserve the rights Bell Pottinger may have in relation to the failure of the business."

Co-founded by Lord Bell (pictured) in 1987, Bell Pottinger rose to become one of the UK largest and most powerful PR firms, employing around 200 staff in London as recently as one month ago. The Holmes Report estimated global revenue at approximately $50m for 2016, with more than two-thirds of that understood to originate from London.

"Bell Pottinger has been heavily financially impacted by the well-publicised issues resulting in losses of clients, partners and staff and culminating in the expulsion from the PRCA" added BDO. 

HSBC is just one of several clients that stopped working with Bell Pottinger, joining a list that also includes Carillion, Temasek, Clydesdale Bank, TalkTalk, St James Place, Acacia, Investec, Richemont and Tourism South Africa. 

"Late last week, the level of those losses, compounded by the inability of the business to win new clients, was such that remaining management were left with no option but to commence the process to place all UK Bell Pottinger entities into administration.

"A notice of intention to appoint three partners in BDO as administrators was filed on the evening of Friday 8 September 2017.  The appointment became effective today, 12 September 2017

"The entities in administration are:  Bell Pottinger Private Ltd, Bell Pottinger LLP and Bell Pottinger Services Ltd.  None of the subsidiaries outside the UK is in administration; they continue to trade under the control of their separate management teams."