Snowy Mountain meltdown as precious artwork vanishes

If you see something like this, be sure to tell the HK police

"HK police seek 'thrown away' painting worth $3.72m" is the title of a BBC news post today which reads, in salient part, as follows:

"Hong Kong police are investigating the disappearance of a painting worth $3.7m (£2.2m) from a hotel, amid reports it may have been accidentally thrown away. The painting is believed to be a Chinese ink work by artist Cui Ruzhuo entitled Snowy Mountain.

It was reported missing by auctioneers Poly Auction on Tuesday, having been successfully sold on Monday. Several local media reports suggest cleaners at the Grand Hyatt could have thrown the painting out as rubbish.

According to the South China Morning Post, CCTV footage showed a security guard kick the packaged painting over to a pile of rubbish. Citing a police source, the paper said that cleaners were then seen throwing the rubbish away, with the rubbish taken to landfill. In a statement, the hotel said it was working with investigators.

"As the organiser has rented our event venue for this auction, Grand Hyatt Hong Kong is doing its best to offer assistance to Poly Auction including letting the police view the CCTV footage along with our security team," it said.

The hotel said the auctioneers were responsible for items they sold ...".

This blogger is not sufficiently familiar with the facts, the terms of any contract between the hotel and the auctioneers or the details of local law to be able to make any confident pronouncements as to who is responsible -- and for what. However, it seems to him that paintings and other artworks are so frequently disposed of, damaged or destroyed by cleaning staff that the risk of this happening is as much a foreseeable outcome of hosting an exhibition or auction that one might wonder why there isn't some regular routine or protocol that should govern what cleaners can and can't do in circumstances in which artwork is being exposed within their establishments.

Another point to ponder relates to the artist's resale right.  No such right appears to exist in the law of Hong Kong but, if it had, would an artist be able to secure a proportion of the auction price of the resale of a painting that was lost or destroyed before it ever reached its intended purchaser?

Hong Kong's art market boom as China slows?

At the beginning of October, leading Chinese auctioneer China Guardian held its debut auction in Hong Kong, having been lured by Hong Kong's international buyers, low tax regime and stable regulatory framework.

Landscape series by Qi Bashi, Album of Mountains and Rivers
1922, which led China Guardian's auction

Reuters reports on the apparent shift in the Chinese art market as follows:

China Guardian's sale of Chinese art and classical furniture in the former British colony follows its rise as the world's third largest auction house on the crest of China's art market boom, with sales of $1.77 billion last year...

The sale, though relatively small, is seen as a symbolic foray by China's top auction company into the turf of goliaths Christie's and Sotheby's who have long dominated international auction hubs like Hong Kong, New York and London.

China Guardian's key rival, Poly International is also planning an inaugural Hong Kong sale in late November, while A&F Auction and Beijing Rongbao Auction aim to enter Hong Kong in one or two years, according to art market reports.

China's wave of millionaire buyers and investors have helped propel Hong Kong into the world's fourth largest art auction hub, with nearly 7 percent of global art auction revenue in 2011, according to French art database Artprice.com...

Art dealers and experts say the Chinese expansion into Hong Kong is also being driven by a tightening regulatory environment in China, that has grappled with widespread art crimes including tax evasion, a proliferation of fakes, money laundering and manipulative bidding practices...

In April, a large-scale Chinese customs probe into tax evasion on art imports delivered a blow to the art market, with at least six prominent art dealers, collectors and artists being investigated, according to art dealers and Chinese media reports. "The tax probe had a huge impact on the spring auctions in China," said the owner of an art gallery in Taipei who is a frequent buyer in the Chinese art market, but who declined to be identified because of the sensitivity of the matter. "Everyone finds himself in danger so the market is extremely cold." According to market researcher ArtTactic, total auction sales this spring from the biggest four auction houses in the China market dropped to $1.5 billion, 32 percent lower than the autumn season in 2011 and 43 percent less than a year before...

Art market experts, however, say Hong Kong's laissez-faire economy, solid regulatory framework and zero-tariffs on art imports, make it a secure and stable alternative for China's auction firms. Although Beijing has lowered its import duties on arts to 6 percent from 12 percent since the beginning of 2012, another 17 percent of value-added tax still poses a huge burden to Chinese auction houses.

It certainly seems that the Hong Kong market can only continue to grow, especially in light of its favourable tax regime as compared to China, as well as, obviously, its proximity.

Source: Reuters, 7 October 2012