Ethical Issues at Christie's
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Case Details:
Case Code : BECG060
Case Length : 15 Pages
Period : 2000 - 2005
Pub. Date : 2006
Teaching Note :Not Available
Organization : Christie's Inc.
Industry : Auctioning
Countries : United Kingdom, USA
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts Contd...
Other Ethical Issues at Christie's
Though the 2000 price-fixing scandal was the most talked about and damaging for Christie's reputation and its finances, the auction house was dogged by a series of smaller controversies at different points in time.
NO LONGER ONLY AN AUCTION HOUSE
In addition to being an auctioneer, Christie's was increasingly playing the role of principal. In other words, it effectively was buying the paintings it was auctioning, or at least a major section of them. One such instance was its purchase of the Ganz collection in 1997...
Hiding Nazi Loot
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In October 2003, The Guardian - a reputed newspaper carried an article accusing Christie's of hiding the origins of the painting - 'Merry Company with a Woman Playing a Lute' by the Dutch master Jacob Duck, (valued at £40,000-£60,000) which the auction house had intended to auction.
The painting, which reportedly belonged to a Jewish couple, was known by Christie's to have been looted by the Nazis in 1937.
Despite this, it handed over the painting to its client - Carl Schünemann (Schünemann), a German private collector. It didn't even consider it necessary to inform art market authorities or the heirs of the original owners of the picture...
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A Replay?
Again in October 2003, even before the 'Merry Company ...' painting controversy had died down, Christie's found itself embroiled in another similar controversy where the finger was again pointed at it for refusing to disclose the identity of the current holders of an 18th century masterpiece stolen by the Nazis and being claimed by the heirs of its original Jewish owners. The picture, in question, was 'A Venetian scene' by the 18th century Italian master Michele Marieschi valued at £ 250,000...
Picture Imperfect
Analysts say that Christie's price-fixing deal with Sotheby's and other issues such as selling stolen art, withholding the whereabouts of Nazi loot, and the apparent disregard for national treasure as evidenced by it indulging in the sale of heritage art pieces - all point to the lack of ethical standards at Christie's.
It has to be mentioned that the auction house defended each of its deeds with vigor -it entered into the price-fixing deal because of a gloomy economy, falling margins and rising costs; it withheld the identity of the holder of Nazi loot because disclosing the identity would amount to breach of duty; and cases when it was found selling stolen art were not deliberate...
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Exhibits
Exhibit I: A Brief Note on Sotheby's
Exhibit II: Some Auction Houses
Exhibit III: Price-Fixing Scandal: The Chronology of Events
Exhibit IV: Major Sales at Christie's
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