London - On a balmy June evening, Heather Kerzner, flanked by her handsome fiance James Henderson, looked every inch the accomplished hostess. Divorced for several years from her billionaire ex-husband, South African magnate Sol Kerzner, she and Henderson, one of London’s most consummate PR men, were looking forward to their own wedding this November.
As a modern-day dowry, she had invested a large sum into his firm, Bell Pottinger. Heather was convinced it would prove an astute investment, and that the pair could forge a working, as well as a romantic, partnership.
No wonder they were all smiles as they greeted guests to the firm’s annual summer party at Lancaster House, an event that has become a regular fixture on the capital’s social calendar. But beneath the gilded surface loomed a scandal over Bell Pottinger’s actions in South Africa, where it is accused of inciting race hate.
That scandal erupted this weekend when Henderson sensationally resigned as chief executive.
It is the latest explosive chapter in a saga that, as The Mail on Sunday reveals, is gripping the City and London’s high society.
And it is a debacle that has pitted Lord Bell, the wily elder statesman of the PR world, against Henderson, his one-time protege turned nemesis.
While Bell, 75, is famed for his willingness to act for even the most notorious dictators and pariahs, including the late General Pinochet of Chile, Henderson has had a more conventional career concentrating on City spin-doctoring.
He has also acted for the Duchess of York and helped Madonna in her custody battle for her son Rocco.
The Bell Pottinger debacle has reverberated far beyond London, creating full-on political upheaval in South Africa, a country still traumatised by its apartheid years and deeply sensitive to racial issues.
Henderson, 52, and Heather found themselves at the centre of the storm after the firm was accused of helping orchestrate a ‘fake news’ campaign on behalf of the Guptas, one of the country’s most powerful business dynasties.
This included sexual slurs against journalists, rent-a-crowd protests and paying Twitter users to spread propaganda. Henderson, while saying much of what has been alleged is not true, admitted that enough of it was well founded to cause ‘deep concern’.
‘I have to take responsibility for what happened because I was running the ship,’ he said. ‘I did continually ask questions and debate whether we should keep the account. I had the account under constant review, but I trusted people.’
Back at the party in June, however, there was no inkling he would be handing in his resignation in just a matter of months.
Heather, wearing a dazzling lurex dress with a silver top and a diamond pattern fringed skirt, glided among the eclectic mix of guests. They included the Duchess of York and media figures such as ITV political editor Robert Peston and Sky anchorwoman Kay Burley.
One man, however, was notably absent: Lord Bell, better known as Tim Bell, who made his name as Mrs Thatcher’s favourite PR man and who founded Bell Pottinger. On previous occasions, Bell and Henderson, whose respective PR companies had merged several years earlier, had hosted the event jointly. But this summer, the pair were at daggers drawn.
Bell admits he was instrumental in bringing in the contract at the heart of the row – a lucrative £100 000-a-month deal from a South African company called Oakbay. It is controlled by the Gupta family, who have close ties to President Jacob Zuma.
However, Bell pins the blame for the mess on Henderson. In order to further the interests of the Gupta clan, Bell Pottinger is said to have stirred up racial unrest over ‘white monopoly capital’ – the term used for the dominance of South African business by a few wealthy white interests.
This is a sensitive subject in a country where many black people continue to live in hardship. The motive is said have been to deflect attention away from the Guptas’ activities and their closeness to Zuma. Bell Pottinger is said to have set up fake Twitter accounts to target prominent white businessmen, some of whom were also Bell Pottinger clients.
Several, including luxury goods group Richemont and South African banking group Investec, dumped the firm. Henderson ditched the Oakbay account in April this year, but not before it had become a fully-fledged scandal in the tinderbox of South African politics. Although Henderson had no personal involvement, he has fallen on his sword in a bid to salvage the business. Henderson confirmed his resignation when contacted by The Mail on Sunday. ‘I hope we can make amends with South Africa,’ he added. ‘If, for example, they can use our great skills to help charities there.’
As for Bell, even before the Gupta affair erupted, sources say there has been bad blood between him and Henderson for some time.
The two used to socialise together and Bell was invited to the 21st birthday party of Henderson’s twins, Atalanta and Felix, two years ago. He is not, however, on the guest list for Kerzner and Henderson’s wedding, a family affair to be held in London.
Relations between the two men were showing signs of strain long before the row over South Africa. Having become the biggest shareholder in Bell Pottinger and taken on the mantle of chief executive, Henderson is said to have become exasperated because he felt Bell was not bringing in enough business to justify his pay and expenses.
‘James was the chief executive and the biggest shareholder but when he got on a plane he turned right into the cheap seats, whereas Tim turned left into first class,’ said one observer.
Bell left the firm last year and set up a new practice called Sans Frontieres. He says he helped bring in the Oakbay account after travelling to South Africa to meet representatives of the company.
But he said on Saturday that he warned against taking on the account as soon as he returned to London from Johannesburg after his first meeting with Oakbay in January, 2016.
Bell said this was because it represented a conflict of interest with other South African clients which the firm already represented. ‘I did the first meeting, I made the first submission and we were awarded the account. But I also said, as soon as I came back from South Africa after that first meeting, that we shouldn’t take the account because it was a conflict of interest with our other South African clients,’ Bell said.
‘They [the other directors of Bell Pottinger] are guilty as charged for what they did. I pointed out what was wrong with it and I resigned the account in spring 2016. The Gupta situation happened under James Henderson’s watch. I had nothing to do with it whatsoever. Henderson did not know how to handle it. He got nailed and he cannot blame me for it.
‘I left the company in August last year – they forced me out.’
But The Mail on Sunday has seen correspondence where Bell is enthusiastic about taking on Oakbay after his visit to South Africa, which he describes as a ‘great success’. Bell also denied any suggestion that he failed to cover his costs while employed at Bell Pottinger.
‘That’s complete rubbish. I have always covered my costs: the Sultan of Brunei paid me £500,000 a year, the government of Bahrain pays £2.5 million a year,’ he said.
Henderson said: ‘I am very concerned that under my watch, this was allowed to happen. Heather and I have a major stake in the business, so as an investor I am there in the background to help the business do well.’
It has been a devastating time for Henderson, both professionally and personally. Not only has he seen a 30-year career torpedoed over a client he never even met, he is also responsible for risking his fiancee’s capital. After taking her stake this spring, she is the largest shareholder and between them the couple own around 40 per cent of the company.
The pair, who have six children between them, were introduced by the Duchess of York in the autumn of 2015 at a charity dinner for Children in Crisis. The debacle is particularly mortifying for Heather because of her South African connections through her former husband. ‘I have a huge affection for South Africa and South Africans even after Sol and I were divorced,’ she said on Saturday.
‘I would never invest in a company that would do anything to harm South Africa or its people. The impact on both of us has been horrendous. It is devastating.’
When she invested in April, Heather believed a line had been drawn under the affair as Bell Pottinger had parted company with Oakbay. Over the summer, however, a cache of emails from the Gupta empire was leaked, including ones from Bell Pottinger regarding its work.
Heather added: ‘James has been a terrific CEO. Ninety-nine per cent of the work they do at Bell Pottinger has been great. In hindsight I wish they had never taken that account.’
As his loyal fiancee says, Henderson does have a glittering CV. Having started his career with City firm College Hill, he founded his own firm, Pelham, where he built an impressive franchise in the energy sector, before merging with Bell Pottinger in 2010.
His work has encompassed huge business deals, such as working for Russian oil giant Rosneft and advising the Lloyd’s of London insurance market in the aftermath of 9/11.
‘He is the consummate fixer and protector, a PR whose integrity is exceptional,’ said one client who remains loyal.
Although his prowess as a rainmaker, bringing in big clients, is not in question, some doubts hang over his performance as a manager. A report from law firm Herbert Smith Freehills into the South African debacle, expected to be published tomorrow, is likely to criticise his oversight.
It is a bitter chapter for a man who has won widespread respect as one of the most foot-sure spin doctors in London. He now faces the biggest PR task of his entire career – the battle to restore his own reputation, though with his formidable track record, there is little doubt he will bounce back.
Mail On Sunday