The ANO does not prohibit the carrying of passengers during banner towing. However, it does prohibit the carrying of passengers on a
helicopter while carrying an underslung load. (CAP 393 Section 128)
I would suggest that you have a good read of;
http://www.caa.co.uk/docs/33/CAP393.pdf
before accusing the pilot of illegal activities, just in case he has a good lawyer.
Dave