Sotheby's exec says art dealer manipulated sale as fraud trial continues

MANHATTAN (CN) — A Sotheby’s executive said Monday that he had no knowledge of an art dealer’s strategy to manipulate the renowned auction house and re-sell pieces sold by Sotheby’s to a Russian billionaire at inflated prices.

Russian fertilizer tycoon Dmitry Rybolovlev claims Sotheby’s aided and abetted Swiss art dealer Yves Bouvier in selling him 38 works of art at inflated prices, for a total of $2 billion, from 2003 to 2015.

But Samuel Valette, vice chairman for private sales worldwide at Sotheby’s, testified he was unaware of Bouvier’s strategy to intentionally misrepresent what he intended to do with the pieces he purchased.

In emails shown in court, Bouvier told Rybolovlev’s financial adviser Mikhail Sazonov about his strategy to break Sotheby’s agents’ morale and “deflate the price” when negotiating the purchase of Leonardo da Vinci’s “Salvator Mundi” painting.

According to Valette, Bouvier told Sotheby’s he was interested in the painting to display at his “Pinacothèque” exhibition gallery in Paris.

In emails between Bouvier and Sazonov, the art dealer said he would approach the sellers under “the guise of the Pinacothèque” to persuade them to lower the price.

As part of his strategy, Bouvier told Sazonov to omit Rybolovlev’s interest in the painting, because he thought the sellers would demand a higher price if they knew a Russian billionaire was interested in the piece.

According to Valette, Sotheby’s was supposed to have a meeting with a “Russian buyer” to discuss the painting, but it was canceled last minute.

“For the sake of modesty and to shake their confidence, I recommend canceling the visit and say there’s no longer any interest,” Bouvier wrote in an email to Sazonov.

At a 2014 dinner in Paris, Bouvier’s company Blancaflor reached a deal with Sotheby’s to purchase the painting for $83 million. But in emails shown from that same night, Bouvier told Sazonov he was in tough negotiations with the sellers and persuaded them to sell the painting for $127.5 million.

Last March, U.S. District Judge Jesse Furman, a Barack Obama appointee, dismissed the bulk of Rybolovlev’s claims but still ordered the auction house face trial for aiding and abetting Bouvier in inflating the prices of these four pieces of art for sale.

In addition to Salvator Mundi,” Sotheby’s is accused of assisting Bouvier in manipulating the prices of Amedeo Modigliani’s limestone sculpture “Tête;” Rene Magritte’s “Le Domaine D’Arnheim;” and Gustam Klimt’s “Wasserschlangen II.”

During Monday’s testimony, Valette was also asked about Klimt’s “Wasserschlangen II,” an oil painting by the Austrian painter done in 1907. It’s a colorful depiction of water serpents intended to demonstrate the sensuality of women’s bodies and same-sex relationships.

“This is an extraordinary painting,” Valette said Monday. “I don’t know if it’s once in a lifetime, but you definitely don’t see it every day.”

In Sotheby’s sale negotiations for the artwork, the auction house gave the painting the code name “Cottonmouth." (According to Valette, assigning code names to pieces of art is customary for particularly important pieces.)

Though Bouvier purchased the painting for $126 million, he later resold the painting to Rybolovlev for $183.8 million.

According to Valette, he had no knowledge of Bouvier’s intention to resell the painting to the Russian billionaire after the initial purchase.

But, Valette added, he said he knew it was a possibility because Rybolovlev accompanied Bouvier when he viewed the painting during negotiations.

Bouvier was not named as a defendant in the lawsuit, which was filed by Rybolovlev’s family trust Accent Delight International. But he has faced criminal charges in France, Monaco and Switzerland, though the last of these charges have been dismissed following a confidential settlement in Geneva.

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