Chasing the Defaulting Chinese Bidder

Bloomberg did some calculations based upon Sotheby’s nine court filings in Hong Kong against Chinese buyers who have reneged on their bids and comes up with a total of $22m spread over 19 lots. That’s just at Sotheby’s and may not be the full extent of the auctioneer’s loses. Sotheby’s is pursuing a naming and shaming strategy by getting these judgments in Hong Kong.

Some French auctioneers are taking a different approach. Then they’re selling items again and hounding the defalcators to make up the shortfall: “Once we’ve made the sale, we’ll be suing the non-payer for the difference,” Pierre Ansas told Bloomberg.

• “It’s happening to everyone,” said John Axford, head of Asian art at the U.K. auctioneersWoolley & Wallis. “I don’t know an auctioneer or a dealer who hasn’t been affected.”
• “It’s an international problem,” London-based dealer Roger Keverne said. “Some Chinese dealers are trying to sell things before they pay for them. We don’t know the full extent of it. The concern is that they can also be the under bidders. They push prices up. It isn’t a genuine market.”

Chinese Art Buyers Renege on $22 Million, Force Clampdown (Bloomberg)