Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Russian billionaire Dmitry Rybolovlev said he relied on documents from Sotheby’s when making art purchases despite growing concerns about the high prices he was quoted, as he testified this week at a trial in a lawsuit he has brought against the auction house in New York.
Rybolovlev is seeking $377mn in damages from Sotheby’s in the lawsuit, accusing it of being complicit in a years-long scheme by a Swiss art dealer, Yves Bouvier, to sell him hundreds of millions of dollars of art masterworks — including Leonardo da Vinci’s “Salvator Mundi” — at inflated valuations.
“We completely trusted Bouvier and trusted Sotheby’s. We couldn’t even imagine Sotheby’s could participate in something like this,” Rybolovlev said as he testified through an interpreter.
“When the largest company in this industry with such profound reputation does these actions, it makes it incredibly difficult for clients like me . . . to understand what’s going on,” Rybolovlev said. “It’s important for the art market to be more transparent . . . clients don’t stand a chance.”
Rybolovlev testified how documents shared with him from a representative at Sotheby’s who worked closely with Bouvier on a number of sales were pivotal to trusting the prices he was paying for the art.
However, counsel for Sotheby’s portrayed Rybolovlev, the owner of football club AS Monaco, as a skilled and experienced businessman with experience conducting due diligence on big financial decisions.
In his testimony, Rybolovlev detailed his rise from a medical student in the former Soviet Union to a business magnate worth $7bn, offering a glimpse into the making of the oligarchs as Russia transitioned to a market economy after the Soviet Union’s collapse.
Rybolovlev said that given the scale of his investment and business holdings, he relied on deputies to handle the logistics of his art purchases.
Marcus Asner, a lawyer for Sotheby’s, asked Rybolovlev if he felt his deputy had done a poor job, given the estimated $500mn-$1bn Rybolovlev believes he overpaid for his art collection over a decade of working with Bouvier. “Let’s just say there was room for improvement,” he replied.
Asner noted that documentation Sotheby’s provided on the authenticity of the “Salvator Mundi” — which Rybolovlev cited as pivotal to his 2013 decision to buy it for $128mn — also helped him resell the painting through Christie’s in 2017 for $450mn, shattering auction records.
Sotheby’s pushed back on Rybolovlev’s claims that the art world should be more transparent, noting that his ownership was not disclosed at the time of that sale.
In a statement after Friday’s testimony the auction house said: “Throughout Mr Rybolovlev’s testimony, it was patently clear that, as a self-made billionaire with a diverse and expansive network of interests, none of the care and attention to detail he attended to his businesses were given to his art transactions.”
Bouvier is not a defendant in the Sotheby’s trial, and has maintained his innocence in his art sales to Rybolovlev. He settled a legal dispute with the billionaire in Switzerland last month, and other cases in various jurisdictions have been settled or dismissed. A representative for Bouvier said: “The allegations being made against Mr Bouvier in the New York proceedings have already been rejected by authorities all around the world.”
Read the full article here
