Now that Chinese investor Taikang Life Insurance Company has amassed a 13.5 percent stake in Sotheby’s, the auction house announced on Friday September 9 in an SEC filing that it will work with the insurer to “identify a qualified independent director to serve on the board.”
As part of the agreement, Taikang will not acquire more stock in Sotheby’s at least until November 6. If a director is not identified by that time, either Sotheby’s or Taikang can terminate the agreement.
The agreement allows for peace of mind on both sides; for Taikang it means having a say in who the new director is, and for Sotheby’s it means that the auction house has short-term assurance that Taikang will not make any unexpected management moves or increase its voting power through additional share acquisitions.
“We welcome Taikang’s investment in Sotheby’s and are optimistic about its support for our strategic initiatives,” Sotheby’s said in a written statement. “We also appreciate Taikang’s assistance to recruit a highly qualified independent director from Asia and remain focused on executing outstanding results for our clients and shareholders. ”
Taikang’s CEO and chairman is Chen Dongsheng, the grandson-in-law of former Chinese leader Mao Zedong. He is also founder and president of China Guardian, the country’s second-largest auction house (after Poly International), as well as deputy chairman of China Auction Association (CAA).
Sotheby’s, which lost two directors this year—John Angelo, who served since 2007, died in January and Robert Taubman, who served for more than 16 years, stepped down in May—has been searching for a director with experience in Asia.