Hong Kong expert questions security in the China art market

As we reported ten days ago, a heart-stopping presentation during Asian Art in London, sponsored by Edinburgh-based auctioneers Lyon & Turnbull, was made by a Senior Inspector in the Hong Kong Police, also a private art security consultant, Toby J A Bull. In our view, it was probably the most significant talk in a long series of events.

SONY DSC

Toby J A Bull of Trackart Art Risk Consultancy, Hong Kong  Photo Paul Harris

The talk, entitled A Quest for Authenticity in the Chinese Art Market, dealt with a range of areas of concern for dealers and collectors ranging from the nebulous role of Hong Kong in the international trade to tomb robbing, fakes and forgeries, money laundering and theft. He started his presentation with a dramatic quotation from the novel The Gilded Seal by James Twining: ‘Forgery is the paedophilia of the art world. Once the suspicion is raised, you are presumed guilty, even when proven innocent. It’s a shadow that never leaves, poisoning everything you touch. So you need to be either very brave, or very sure that you’re right, before you try forgery in this city . . .’. As a result, the Hong Kong art business is a tightly held industry difficult to penetrate and opaque in the extreme.

Bull emphasised initially that he was not talking on behalf of the Hong Kong Police, although he is a Senior Inspector there. There is no art crime squad within the Hong Kong Police. As he spun his tale, however, it became quite clear why he was not talking on behalf of the Police: the Police Authority simply has no role in preventing illegal activities related to the art world.

The 1997 agreement between China and the UK specifically provided for strict Chinese laws on the protection of cultural relics NOT to apply to Hong Kong: one country, two systems. There are separate Export Laws and in terms of Hong Kong’s Import and Export Ordinance (Part IV), there is provision for a Freeport handling ‘Unmanifested Cargo’ which simply facilitates smuggling. Once goods have passed through the Freeport of Hong Kong they are effectively legitimised with all the necessary export-import paperwork. This is particularly relevant in relation to the import of antiquities to mainland China where an import duty of around 35% is imposed.

The vast volume of goods in containers means that a statistically minute proportion is ever examined. Between 1992 and 1996 (under the UK) HK$ 15 million of Chinese antiquities were seized in HK; the figure went down dramatically between 1997 and 2006 totalling HK$2.3m.; between 2007 and 2012 no Chinese antiquities at all were seized ! Many of these containers carry thousands of copies of antiquities: forgeries. Not only is porcelain copied on an industrial scale within mainland China, but, even, Kuomintang stickers to accompany items said to originate from the haul of evacuated antiquities during the dying days of the civil war 1948-49. The quality of fakes is now extremely high.

There is no unit in the Hong Kong police these days engaged in investigating illegal activities in the local art world despite the fact that large quantities of stolen and forged artefacts pass through the Freeport every week. These include the products of tomb robbing in China. Such looting “requires an elaborate, multi-layered network of grave robbers, middlemen and art dealers.” Such networks flourish in China.

Hong Kong very often benefits. In 2002, antiquities looted from eight outer temples of The Forbidden City were included in a Christie’s Hong Kong auction catalogue and were ultimately withdrawn from sale. Christie’s deemed it an isolated case’ and averred that it ‘devoted considerable resources to investigating the provenance of all objects offered for sale’.

“The majority of art is stolen for money laundering purposes and art sales are often components of the laundering process,” Bull said. The media usually reports in terms of dramatic value the stealing of works of art. This helps the criminals who will fund their ongoing activities at around 3-10% of such publicised value. Effectively, stolen art is used as a financial underpinning to the China-Hong Kong underworld.

SONY DSC

One of Toby Bull’s slides from his presentation    Photo Paul Harris

In Hong Kong, anti-money laundering regulatory action is based within the Anti-Money Laundering task Force (AMLTF) of which China and Hong Kong are both members. It investigates both financial institutions and Designated Non-Financial Businesses and Profession (DNBFs). Incredibly, the art market is not classified amongst the DNBF’s!

On occasion, thefts are particularly brazen. In April 2014, the Chinese mainland auctioneer Poly International held an auction in the Hong Kong Grand Hyatt Hotel where the hammer went down for the equivalent of US$3.7m. on a painting by the popular Chinese artist Cui Ruzhuo (see below). It was packed up for delivery to the buyer and stacked for collection whereupon it disappeared and has never been seen since. The Hong Kong Police were involved but were obliged to back off after Poly roundly declared it was simply ‘lost property’. Many in the Police Authority believe it was simply stolen and that Poly were keen to have the whole unedifying matter dropped . . .

 

John Walden Collection of Chinese art to be sold by Dukes

john walden collection Jade conch shell from the Walden sale

The Dorset Echo newspaper reports that the collection of Chinese art that belonged to John Walden the famous Hong Kong administrator and pro-democracy campaigner will be sold by Dukes of Dorchester this week, on November 14.

Apparently referred to as JCC to friends – and Jesus Christ in China to some others – Walden was a significant political figure in Hong Kong during the second half of the 20th century. He died last year. He began his career in Hong Kong after graduating from Cambridge and served in various roles until he became Director of Home Affairs from 1976 until retirement in 1980. He also worked as a Justice of the Peace. Walden remained in Hong Kong until 2010 when he returned to live in Salisbury, Wiltshire.

john walden John Walden, Hong Kong

His collection contains a number of jade pieces including a yellowish-white jade dragon and phoenix pendant possibly from the Han dynasty and potentially an important discovery. The three inch long piece is estimated to sell for up to £10,000 pounds, but it is thought that it could well exceed that figure.  Andrew Marlborough from Duke’s said: “We are delighted to have been asked to handle this sale which it is hoped will serve both to celebrate John Walden’s love of Chinese art and culture and his lifelong dedication to the people of Hong Kong.

A Dukes spokesman said, “He took early retirement in order to become an independent political commentator, activist and author. Walden’s taste conformed to traditional ideas of connoisseurship but his real passion was for jade.”

Walden’s daughter Vanessa Hibbert described her first childhood visit with her father to Dunt and King’s shop in Hong Kong. She said: “I would stand with my curious nose and inquisitive eyes level with the counter top, whilst these two gentlemen turned over pieces of smooth jade in their fingers and murmured at the beauty of the pieces they examined.”

The Asian sale on November 14 includes other Chinese items, as well as Japanese and Indian art and Indo-Javanese bronzes.