Going, going, gone . . . but where exactly is the $3.7m. painting?

Snowy Mountain, by Cui Ruzhuo, was sold by Poly Auctions this week in Hong Kong for US$ 3.7m. But where is it?

A 28.8 million Hong Kong dollar (US$3.7 million) Chinese ink painting sold at a Hong Kong auction is missing. And the best guess is that it went out with the rubbish . . .

The painting Snowy Mountain by highly rated Chinese contemporary artist Cui Ruzhuo was sold at a Poly Auction event on Monday at the Grand Hyatt Hong Kong. But by the following day, the auctioneers had reported the painting missing to Hong Kong police.

A hotel spokesperson said it allowed police officers to view video footage from its security cameras that monitored the auction area. It is reported in local media that police officers saw video footage of a neatly packaged painting sitting near a pile of hotel rubbish that was later thrown away. Police were reported to be diligently searching a landfill in Hong Kong’s northern district of Tuen Mun for the missing painting.

Poly failed to respond to requests for comment. In a statement two days after the sale, police said the painting was now considered “lost property”. The matter was no longer being treated as theft apparently.

Snowy Mountain was the second most expensive item sold Monday at a special event that featured 28 of Mr. Cui’s ink works. His Landscape in Snow sold for HK$184 million – a record auction price for the artist. Fortunately, it was not lost . . .

Poly is China’s largest auction house and the world’s third-largest, after international powerhouses Christie’s and Sotheby’s. It is based in Beijing and began holding Hong Kong sales in 2012.

Over the past week, Poly, Sotheby’s, Christie’s and China Guardian (China’s second-largest auction firm), have held multi-day sale events spanning several categories including traditional Chinese paintings, contemporary Asian art, Chinese antiques, jewellery and wine.

Our legal expert writes: In the event of the painting not being found, a legal quagmire opens up. Technically, the legal situation is that ownership of an item sold at auction passes to the purchaser with the fall of the auctioneer’s gavel. In practical terms, if the buyer has not actually paid for it and the lot is lost by the auctioneer, his servants or agents, the buyer would most probably refuse to pay up. The situation arising has become more complicated since the imposition of Buyer’s Premium by all auction houses. This brings the buyer into a contractual relationship with the auctioneers (although, confusingly, auctioneers will always claim the relationship is with the vendor, usually unknown to the buyer). Many buyers will claim that the auctioneer owes a duty of care – that is what is being paid for with the buyer’s premium. If the buyer has, in fact, paid for the picture and engaged other parties or party to pack up and deliver the picture in question, then his claim would be against them. That may be fine if the carrier is a large international company but a small local carrier may simply have insufficient funds to make due compensation. What this incident does illustrate is the dangers auctioneers face when they sell out of relatively insecure premises – like an international hotel. Their own premises represent a far more secure environment where security and systems are well practised.

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