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Thursday, 12 March 2009
Bungled auction renews debate over dubious lots
The Christie’s sale of two disputed Qing dynasty bronzes has renewed a debate in art circles on the moral and legal issues of auction houses selling controversial items, including those that some nations regard as loot.
The Christie’s sale of two disputed Qing dynasty bronzes has renewed a debate in art circles on the moral and legal issues of auction houses selling controversial items, including those that some nations regard as loot.
Cai Mingchao’s subsequent default after successfully winning the bid may also prompt calls for tighter checks on bidders.
Christie’s has held that the sale of all of the Yves Saint Laurent items, including the sculptures, was legitimate because the items had legal titles. Not so, according to an ad hoc group of lawyers in China that in January threatened to sue Christie’s for offering the animal-head bronzes, saying it contravened international law.
The mid-18th century sculptures of a rabbit and a rat were taken from the Old Summer Palace in Beijing in 1860 by invading French and British soldiers during the opium wars.
On February 23 in Paris, Mr. Cai called Christie’s Shanghai-based business development director Wang Jie and registered to bid.
On February 25, Mr. Cai said, Mr. Wang called to say Christie’s agreed that he would have three to four months to settle the bill if he won.
None of the agreements was documented, Mr. Cai said. That contravenes Christie’s terms-of-sale rules stated at the back of its brochure that “a prospective buyer must complete and sign a registration form and provide identification before bidding”.
It is not uncommon for auction houses to let their best customers and those they consider wealthy bid on big-ticket items without asking guarantees or proof of ability to pay, said George Sutton, a Minneapolis-based analyst with Craig-Hallum Capital Group, which covers Sotheby’s.
Art transactions were worth €43.3 billion (HK$427 billion) in 2006, according to a report by the European Fine Art Foundation last year.
Hong Kong antiques dealer Yumi Kunizuka, whose family consigned a collection in 1989, said this case was not so much a lesson in law and art-auction protocol than manners.
“The whole matter could have been handled with more grace and wisdom by Christie’s, [Pierre Berge, Saint Laurent’s partner, who put the art collection up for sale] and Cai,” Mr. Kunizuka said.
Mr. Berge could have done more for Saint Laurent’s memory by not flaunting the bronzes, Christie’s should not have agreed to auction the items, and Mr. Cai was unprofessional in what he did, he said.
Art-auction defaults are not new. In 1987, Australian businessman Alan Bond bid a record US$53.9 million at Sotheby’s New York for Vincent van Gogh’s Irises, then a record price for any work of art, and could not pay for it. The painting had to be resold.
In September last year, Sotheby’s sued Cnet Inc founder Halsey Minor to recover US$16.8 million that the auction house said it was owed for three pieces he bought at sales.
The default on the bronzes’ purchase raises the question of how well auction houses perform their due diligence and whose interests they represent.
Auction houses make most of their commission from buyers, who pay up to 25 per cent of the hammer price on their purchases, as they lower or waive commission for sellers to secure the right to represent the most valuable collections.
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Bungled auction renews debate over dubious lots
Bloomberg
12 March 2009
The Christie’s sale of two disputed Qing dynasty bronzes has renewed a debate in art circles on the moral and legal issues of auction houses selling controversial items, including those that some nations regard as loot.
Cai Mingchao’s subsequent default after successfully winning the bid may also prompt calls for tighter checks on bidders.
Christie’s has held that the sale of all of the Yves Saint Laurent items, including the sculptures, was legitimate because the items had legal titles. Not so, according to an ad hoc group of lawyers in China that in January threatened to sue Christie’s for offering the animal-head bronzes, saying it contravened international law.
The mid-18th century sculptures of a rabbit and a rat were taken from the Old Summer Palace in Beijing in 1860 by invading French and British soldiers during the opium wars.
On February 23 in Paris, Mr. Cai called Christie’s Shanghai-based business development director Wang Jie and registered to bid.
On February 25, Mr. Cai said, Mr. Wang called to say Christie’s agreed that he would have three to four months to settle the bill if he won.
None of the agreements was documented, Mr. Cai said. That contravenes Christie’s terms-of-sale rules stated at the back of its brochure that “a prospective buyer must complete and sign a registration form and provide identification before bidding”.
It is not uncommon for auction houses to let their best customers and those they consider wealthy bid on big-ticket items without asking guarantees or proof of ability to pay, said George Sutton, a Minneapolis-based analyst with Craig-Hallum Capital Group, which covers Sotheby’s.
Art transactions were worth €43.3 billion (HK$427 billion) in 2006, according to a report by the European Fine Art Foundation last year.
Hong Kong antiques dealer Yumi Kunizuka, whose family consigned a collection in 1989, said this case was not so much a lesson in law and art-auction protocol than manners.
“The whole matter could have been handled with more grace and wisdom by Christie’s, [Pierre Berge, Saint Laurent’s partner, who put the art collection up for sale] and Cai,” Mr. Kunizuka said.
Mr. Berge could have done more for Saint Laurent’s memory by not flaunting the bronzes, Christie’s should not have agreed to auction the items, and Mr. Cai was unprofessional in what he did, he said.
Art-auction defaults are not new. In 1987, Australian businessman Alan Bond bid a record US$53.9 million at Sotheby’s New York for Vincent van Gogh’s Irises, then a record price for any work of art, and could not pay for it. The painting had to be resold.
In September last year, Sotheby’s sued Cnet Inc founder Halsey Minor to recover US$16.8 million that the auction house said it was owed for three pieces he bought at sales.
The default on the bronzes’ purchase raises the question of how well auction houses perform their due diligence and whose interests they represent.
Auction houses make most of their commission from buyers, who pay up to 25 per cent of the hammer price on their purchases, as they lower or waive commission for sellers to secure the right to represent the most valuable collections.
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