BDO UK has indicated that it could take legal action against partners of Bell Pottinger due to their involvement with a client in South Africa that contributed to the PR company’s collapse, on the basis that they breached partnership agreements, according to the Telegraph and The Times.
The Times reported that In BDO’s administrators’ report it said: “Certain members failed in their duty to act in good faith and in accordance with applicable standards of corporate governance.”
“The relationship between the actions of these members and the financial failure of the limited liability partnership appears strongly correlated.”
BDO has reportedly said that said that it was considering a number of possible legal actions.
According to reports, BDO is also pursuing former partners for profits received before the business collapsed.
Bell Pottinger collapsed in 2017 after it was discovered that they had been involved with a Gupta family owned business to create racial tension in South Africa in order to deflect criticism of the Gupta family for its alleged state capture and close links with former South African president Jacob Zuma.
The Gupta family is infamous in South Africa for its connections with Zuma and for directing state funds to finance a family wedding.
KPMG South Africa, which worked for a number of Gupta owned entities, faced an exodus of clients and staff after conflicts of interest were revealed and a KPMG partner attended the wedding funded by public money.
The firm has been trying to rebuild its reputation over the last year by donating fees earned from Gupta-owned entities to not-for-profit organisations and the appointment of new leadership.
BDO UK declined to comment.