Global Counsel, the advisory firm co-founded by Peter Mandelson, is to collapse into administration, blaming the “maelstrom” caused by revelations about the former peer’s relationship with the convicted sex offender Jeffrey Epstein.
Companies including Barclays, Tesco and the Premier League have all deserted Global Counsel, despite the company’s efforts to sever ties with Mandelson and the company’s co-founder Benjamin Wegg-Prosser.
The crisis engulfed Global Counsel after it emerged that Mandelson had sought Epstein’s advice on setting up the business in 2010, shortly after leaving office when Labour lost the general election.
On Thursday, the Financial Times reported that staff at Global Counsel had been told that the “Peter Mandelson legacy” had effectively capsized the business.
In a statement posted on the professional social networking site LinkedIn, Global Counsel confirmed that it had asked a court to appoint Interpath as administrator “to take control of and realise the assets of the company”.
It said: “The continuing maelstrom of political and media attention surrounding Peter Mandelson has made it challenging to continue with the business in its current form. While today’s Global Counsel has no connection with Peter Mandelson, his role as a co-founder and his conduct, particularly in its early years, has indelibly coloured the way Global Counsel is seen in the outside world.
“To be clear, this will no longer be business as usual as the administrators-in-waiting have already indicated that, in the unlikely event that any ongoing servicing of clients is viable, this will be on a limited basis only. Inevitably therefore, this will result in a significant number of redundancies being made by the administrators when they take control of the company tomorrow.”
The company employs about 100 people across London, Berlin, Brussels, Doha and Singapore. Its board said staff had “shown exceptional resilience in the face of circumstances beyond their control”, thanked clients and said shareholders had “suffered a material loss through no fault of their own”.
The collapse comes despite Global Counsel’s efforts over the past two weeks to distance itself from its founders.
Wegg-Prosser stepped down as chief executive earlier this month, as Global Counsel wrestled with the reputational damage of the latest tranche of the Epstein files, released by the Department of Justice earlier this month. The company also announced that Mandelson had sold his shares in the business.
But Global Counsel was unable to staunch the flow of clients out of the door.
Other lost clients included the fintech company Klarna, Phoenix Group and the private equity group KKR. The telecoms company Vodafone placed its contract with the business under review.
The pharmaceuticals business GSK, which has previously sought Global Counsel’s advise, said it had “no plans” to engage with the company in future.
As well as showing that Mandelson sought Epstein’s advice on founding Global Counsel, the files also revealed that Wegg-Prosser had met the sex offender – and shared the company’s business plan – while he was under house arrest in New York.
Sources close to Wegg-Prosser have previously said that he met Epstein once 16 years ago for 25 minutes at the suggestion of Mandelson.
“I had the misfortune to meet Epstein on one occasion,” Wegg-Prosser has said in the past. “It was a short meeting of no consequence and thankfully was never to be repeated.”
The Guardian has approached Global Counsel for comment.
