Sophie’s PR Firm Debts Officially Written Off

  July 19, 2009 at 11:44 am by

The ending of what has been a royal headache and unwanted negative attention has finally arrived. The Daily Mail is reporting that last week, the former RJ-H Public Relations company was officially ended, despite the more than £1.7 million in unpaid debts.

View the image at the Daily Mail

RJ-H PR was founded in 1997 by Sophie Rhys-Jones, now the Countess of Wessex and wife of Prince Edward, the youngest son of Her Majesty Queen Elizabeth II, and Murray Harkin. For the past eight years, RJ-H PR has been dealing with its share of negative publicity. This started when the Countess of Wessex was recorded by Mazher Mahmood, who is known as the “Fake Sheik”, making less-than-polite remarks about William Hague, saying that his face was “all-wrong”, and Cherie Blair, about whom she said was “worse than her husband.”

Shortly after the unfortunate incident with the Fake Sheik, the Countess was accused of using her royal connections to advance her business interests. After these incidents, the Countess publicly stated that she would end her connection to the public relations firm; however, it has now been revealed by the Daily Mail that the Countess continued to stay involved in the firm. She treated RJ-H PR as if it were “her baby”, and was not prepared to fully leave the company, according to the Daily Mail.

The Daily Mail obtained records of the outstanding debts owed by RJ-H, which have since been written off. The largest debt owed was £600,000 to Barclays Bank, which stemmed from a 2004 loan taken out by the PR company in the amount of £1.5 million . The Daily Mail is reporting that £175,000 of the loan was personally guaranteed by the Countess and two other directors of the firm. This debt was one of 32 owed by the firm that was written off.

This action has received a fair amount of criticism. An industry insider, who spoke on condition of anonymity stated that, “I can see no reason for a bank not recalling a personally guaranteed loan other than embarrassment or a desire to maintain their relationship with the debtor. In this case, if they didn’t call it in it’s hard to see it as anything other than a desire to stay ‘in’ with the Royal Family”. The insider continued to say that, “RJ-H was a limited company so, by the letter of the law, Sophie and her fellow directors could rightly claim no wrongdoing in respect of other debts. She is not personally liable for them”. This of course, calls ethics into consideration, and thus, doesn’t lessen the criticism.

Just before the news of the Fake Sheik’s recordings, there had been talks about selling the firm, which was worth £3.5 million at the time. Unfortunately, the news of the recordings was released, and things went downhill from there. The Countess remained silent during this period, and one of the firm’s major clients, the Banyan Tree Hotel in Phuket, terminated their relationship with RJ-H. Unfortunately, the Countess didn’t end her relationship with RJ-H at that time, and things continued to get worse. In 2004, she became the first major Royal to be taken to taken to court over debts.

Despite the negative publicity, and the debts, credit continued to be extended to RJ-H PR, and this has caused a lot of criticism and public scrutiny of the firm. Critics suspect that Sophie’s royal status has both “contributed to and shielded her from the true consequences of RJ-H PR’s extravagant failure”.

Buckingham Palace and Barclay’s had no comments regarding this situation.

To read about, and to discuss the Countess of Wessex, please visit this thread.

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