Rumours abound in the trade: what is going on in the Chinese auction business?

opinion The View from Here

We reported a couple of weeks ago on the staggering price of £810,000 achieved for a 20th century vase at auctioneers Fellows in Birmingham. It had enjoyed a rather more conservative low five figure estimate pre-sale (http://chineseart.co.uk/news/tales-of-the-unexpected-roll-on-with-another-staggering-price-for-a-chinese-vase/). This, in turn, had followed another remarkably high price for a 20th century altar vase sold by Lawrence’s of Crewkerne for 150 times estimate, £252,000. The latter lot did come apparently with some provenance but one was surprised to learn the frank admission from Fellows that their lot was submitted by a Chinese vendor or vendors.

The trade in London, and, indeed, in the provinces, is awash with rumours and talk of ‘money laundering’. There is no suggestion whatsoever that any auction house is involved in any conspiracy. After all, an auction house cannot put a cap on spirited bidding! Nor would they want to.

Set against this scenario is the move to the top of the market of the London auctioneers, exemplified in the closure of Christies South Kensington. The last time we took in an object for sale at South Ken we were rebuffed on the grounds that it would not reach a minimum lot price of £5,000, and was probably worth £2,000-3,000. That is clearly regarded as too low by the bean counters who have ordered the closure of South Ken! Probably realisable values of at least £10,000-20,000 will be sought by the ‘Big Three’ auction houses in London. And, of course, as ever, they will require firm evidence of impeccable provenance.

The inevitable result is that competent provincial auctioneers like Woolley & Wallis, Dukes of Dorchester, Sworders, Bonhams in Edinburgh, Mallams and Lyon & Turnbull will be offered a greater quantity of lots in the £100- 10,000 range for their sales. That could be very good news for auctioneers in the provinces. It will also likely be good news for buyers who will see a level of quality at achievable prices reach the salerooms. However, some smaller auction houses might lack resources in cataloguing and areas of provenance. That is particularly so when schemes originating in the Far East are often exceedingly cunning and sophisticated.

In many such schemes buyer and seller are often in bed together, to utilise a graphic metaphor for a strong relationship. The seller will, effectively, be the same party as the buyer. Let us postulate that you had £1m. of ‘black’ money to remove from a country where the laws have become harsh and uncompromising in terms of corrupt and/or criminal wealth. You might take a vase which looks good enough to actually be an original, and which might have cost up to £10,000 to make in somewhere like Jingdezhen over a period of as much as one to two years. It is offered for sale with a convincing story in a provincial auctioneer’s sale and the seller (who might not, of course, be the seller at all but his agent) agrees to a very modest estimate.

Railtons Feb 17 (14) Section  of a vase catalogued in a recent sale as ‘Republic’ period. Pretty but certainly not . . .

Such a piece will probably generate a considerable degree of interest and the ‘safe’ prevailing feeling will probably be that it is 20th century, Republic period. This era is becoming something of a catch-all description being safely in the 20th century but also producing some increasingly desirable pieces. There will be a plethora of low bids in the £5,000-10,000 range but, exposed at public auction, it will take off as internet bidders push the price to, let us say, £1m.

The piece will be paid for (unlike some other scams), out of, say, Hong Kong and the auctioneer will net buyer’s premium (£200,000, say) and seller’s commission (say, £150,000). Net funds of around £600,000 will have effectively been removed from the maw of the government of the country in which buyer/seller lives and or works. The loss of £400,000 being a perfectly acceptable price to pay , , , And funds of £600,000 have been laundered and are available for whatever legitimate use might be required. The vase can go to the tip or to the back of a cupboard. It does now, of course, have a stunning sales record and, perhaps, it could be returned to the market at some later date with a successful track record . . .

All this is, of course, entirely hypothetical and we are not suggesting for a moment this might apply to any or all of some recent sales. There are endless variations on this theme. Maybe a fruitful area of research for novelist Lord Archer!

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