News-Antique.com - Dec 15,2010 - Do Art Auction Houses Camouflage Results? – artmarketblog.com
I received an email on December 2nd from one of Australia’s leading art auction houses, Menzies Art Brands, with the subject ‘Defamation Alleged’. The email read:
Menzies would like to bring to your attention this story on Page 10 of The Age newspaper today:
LEADING art auctioneer Rod Menzies has described as ”scurrilous” allegations made by Robert Le Tet and Rick Anderson about his business practices, in The Age yesterday.
Mr Menzies, an entrepreneur, cleaning business tycoon and owner of Menzies Art Brands, said he ”always honoured every deal” and was ”well known for carrying out every commitment and for his integrity”.
He said he observed the ”highest ethical standards” and denied suggestions to the contrary. He said in a statement that he had instructed his lawyers to start proceedings for defamation and damages claiming $38 million.
Before we continue, this is not the first time that allegations have been made regarding Menzies’ business practices. In 2008 complaints were made by other auction houses in Australia regarding Menzies’ alleged failure to adequately disclose details regarding guarantees provided by Menzies, as well as details regarding works being sold by Menzies that Menzies either owned or had a share in. Menzies denied the charges which were dropped in March of this year by the Australian Competition and Consumer Commission.
This time around, Menzies is being accused of misleading reporting of art sales through his auction house. The accusations were aired in the Melbourne, Australia based newspaper ‘The Age’ where details of a transaction involving a painting by Brett Whiteley, one of Australia’s most famous and valuable artists, were questioned. According to The Age, the painting in question was reported by Menzies Art Brands as having been sold in Sydney on the 25th of March for A$1.44 million. Apparently, however, only two months later Mr. Menzies was offering the painting in question for sale privately through his company for A$1.25 million, which suggests that it wasn’t sold at all. It is then alleged that Mr. Menzies struck a deal with a collector, named as a Mr. Anderson, to swap the Whiteley painting, and another painting, for two paintings owned by the collector. The swap apparently took place in June of this year.
If this allegation wasn’t enough, ‘The Age’ alleges further issues regarding ownership of the Whiteley painting. Apparently a Melbourne financier launched a court case to retrieve the Whiteley painting, which he claims he owns because his company, Questco Pty Ltd. , loaned money to an art dealer to purchase the Whiteley painting – a dealer who is now having financial difficulties. The Melbourne financier apparently then asked Menzies to sell the painting through private treaty for A$1.25 million, but Menzies reneged on the deal a short time later. Menzies is being accused of then returning the painting to the dealer, not the financier, and purchasing it off the dealer for A$850,000. Mr. Menzies then put the painting up for