Mainlanders top list of 'deadbeat' art collectors
By Pauline Chiou, Special to The China PostHong Kong art collector Alan Lo and his father share a love for Chinese art. The younger Lo buys modern Chinese art; his dad owns an important collection of traditional Chinese ink drawings. In the past, they've sold some of their pieces at auction without much drama. However, there was one particularly frustrating transaction.
June 4, 2012, 2:38 pm TWN
“My dad encountered an experience where he sold a piece of work upwards of US$5-10 million. It took the buyer almost half a year to pay the auction house,” Lo recalls, saying the anonymous buyer was most likely from mainland China. “With big-ticket items, it's becoming more and more of a concern with mainland buyers. To a certain extent, they have less of a tendency to follow the rules of the game. Sometimes, it's not so much about the money. They just can't be bothered. Their attitude is, 'I'm such a big customer. I can't be bothered. Maybe I'll pay a third now and then another third later.'”
Whether it's a cultural issue or a calculated financial move, nonpayment causes major headaches for all players involved. The sellers don't get their money, the auction house doesn't get its commission, storage costs and insurance costs start to add up. “Mainland buyers not paying seems to be a phenomenon that's increasingly prevalent,” says fine art consultant Jonathan Crockett, based in Hong Kong. “They always have the money but they don't necessarily want to spend it. Yet, they still want the art. They want the best of both worlds.” Crockett's worst experience was overseeing a transaction in which the overseas Chinese buyer took two years to pay up.
Sotheby's has been bitten hard in the past and now takes a very aggressive stance against deadbeat auction winners. Sotheby's has filed 13 lawsuits since 2007 with five cases still unresolved. “Our lawsuits do not mean that we are experiencing more defaults than other auction houses. It just means that we take our obligations to our consignors seriously and are willing to take this step when necessary to protect them,” Kevin Ching, CEO of Sotheby's Asia, wrote in an email to CNN. Sotheby's recently sued two mainland buyers, Ma Dong and Ren Chunxia, because they hadn't paid for winning bids that totaled US$15 million. Sotheby's confirms Ren Chunxia has since settled her payment while the case against Ma Dong is still winding its way through Hong Kong's High Court. While mainland buyers get most of the bad rap, industry insiders say the problem also exists among buyers from other emerging markets like Indonesia and Malaysia.
Hong Kong art collector Alan Lo and his father share a love for Chinese art. The younger Lo buys modern Chinese art; his dad owns an important collection of traditional Chinese ink ...