Christie's CEO Was "Panicked" Over Chinese Buyer Default, Leading to Private Sale of Ancient Bronze
Christie's Asian Art Department staff are furious at CEO Steven Murphy over the 11th hour decision to sell a famous bronze vessel privately to a group of Chinese collectors for a price of more than $20 million, artnet News has learned.
The Asian art department staff had been working on the sale for over a year and believed the price of the vessel could climb as high as $50 million on the auction block. Now the deal won't be reflected in the department's auction coffers. The object, known as the “Min" Fanglei, a massive bronze ritual vessel from China that dates from the Late Shang/Early Western Zhou periods (12th–11th century BC) had an unpublished estimate of $15 million but was expected to sell for as much as three times that on the strength of intense interest from mainland Chinese buyers, including a delegation from the Hunan Provincial Museum in Changsha City, where a matching cover to the vessel is currently housed. The final sale prize is believed to be about $30 million artnet News has learned, but as is typical in these cases Christie's refuses to confirm or deny this.
According to an inside source, Christie's CEO Murphy was "panicked" over the possibility of a repeat of the the fiasco that occurred during the Yves Saint Laurent and Pierre Bergé sale in Paris in 2009. That sale included two rare bronze Chinese zodiac sculptures, a rabbit and a rat, that had been looted from Beijing's Old Summer Palace during the 1860s and passed through several hands before coming into the collection of the Parisian fashion designer. Prior to the sale, Chinese state media officials referred to the objects as “war plunder."
One official, Zong Tianliang, a spokesman for the palace administration, told the Telegraph: “We respect the business rules of auction companies as well as the operating mechanism of arts markets. But it's definitely unacceptable to put plunder under the hammer." Liu Yang, a Beijing lawyer who was helping to organize a lawsuit in France, stated to the New York Times: "That Christie's and Pierre Bergé would put them up for auction and refuse to return them to China deeply hurts our nation's feelings."
Cai Mingchao, a Chinese collector and businessman who successfully bid about $40 million for the two works, later announced that he had no intention of paying for them and said they they should be voluntarily returned to China. The zodiac heads were given back to Bergé. Murphy, fearing a repeat of such an incident, pushed for a private sale of the “Min" Fanglei at a lower price in order to avoid the possibility of a public auction misfire, insiders say.
Last summer, Francois Pinault, along with his son Francois-Henri and his wife—actress Salma Hayek—returned the zodiac heads to China at a ceremony in Beijing attended by China's Vice Premier Liu Yandong. According to reports, Pinault acquired the works from a private collector.
Defaults on pricey auction items sold in China or bid on by Asian collectors have become a major problem for auctioneers. For instance, Qi Baishi's masterpiece Eagle Standing on a Pine Tree (1946) drew a stunning $65.4 million at China Guardian in May 2011, only to languish in a warehouse in Beijing in the years since the sale after the winning bidder refused to pay for the work, citing doubts about its authenticity. A report jointly produced by artnet and the China Association of Auctioneers (CAA) last fall indicated that only half of the works offered at auction in China were actually sold in 2012 and stated that the Chinese art market witnessed a decrease in demand. “As a result, the total sales value dropped by US$4 billion (CN¥26.5 billion), a significant decline of almost 50 percent," according to the report. Another report compiled separately by CAA found that about half the sales of artworks worth more than $1.5 million between 2010 and 2013 were not completed because the buyer failed to pay what was owed.
It was well known that Chinese buyers were very interested in the "Min" Fanglei, probably the most important Chinese bronze ever to appear at auction. Indeed, Chinese buyers had approached Christie's in the period leading up to the sale, scheduled for Thursday March 20 at 11am, to purchase the ancient Chinese bronze vessel privately. One interested buyer showed up with a cashier's check for US$20 million.
"We had ample interest on the bronze leading up to the exhibition," Catherine Manson, a Christie's spokeswoman said in an email in response to questions sent to Murphy about whether fear of a buyer default played a role in the decision to sell privately. "The decision to sell privately was the result of the offer and the opportunity for the work to go to a museum," Manson told artnet News.
But internal sources at Christie's suggested otherwise, saying fear of buyer default drove the decision-making and overrode specialists. "I think people here are upset because they worked so hard on this consignment, marketing, catalogs, views, vetting, etc.," said one source. "It's anti-climactic."
“Of course the specialists have every right to be angry unless senior leadership has compensated for it in their goals" for that department, said a former senior executive at Christie's who asked not to be named. “Historically I've seen there always be a disconnect between senior leadership and how they drive and motivate specialists. They tend to put all this pressure on the specialists, and then come in and make these types of decisions, which dilutes the holistic approach to the business."
artnet News began hearing reports of a $20 million private offer on March 18, two days before the planned auction. Other sources familiar with the sale said pressure from the Chinese government may have played a role in the sale. Much is at stake for Christie's, which held its first sale in mainland China in Shanghai last fall (September 26). While Hong Kong, a free port, has proved a lucrative sales hub for both Christie's and its competitor Sotheby's, both have been keen on expanding their sales to mainland China, where they have historically faced strict regulations as foreign fine art companies and have had to team up with local entities to transact business.
Did the Chinese government play a role in Murphy's decision to sell the object privately to a group from Hunan province who have publicly expressed their intention to donate the vessel to the Hunan Provincial Museum? Christie's says no.
But in the wake of the 2009 auction of the Zodiac heads, Beijing officials said they were acting against Christie's in China. The government ordered officials to tighten up the inspection of art that the auction house brings in and out of China, making it harder for the company to do business there. And the State Administration of Cultural Heritage (SACH) issued a statement condemning Christie's auction of the sculptures, saying it would have "serious effects" on Christie's development in China.