This Wednesday, former chairman of Sotheby’s auction house, Alfred Taubman, who possesses controlling interest in the company, was found guilty of conspiracy to secretly share the market with a competitive company, Christisie’s. Now, the 76-year-old Alfred Taubman is threatened with 3 years of imprisonment.
In materials of the investigation, it is being confirmed that in 1993, Taubman, concerned with decreasing the income of Sotheby’s, secretly agreed with then-chairman of Christie’s, Anthony Tannant, to introduce a strict cost system of both companies’ service and to refuse to give different discounts to clients.
As a result, both companies illegally used their control over the main part of world market of art, jewelry, and antiquarian furniture, while keeping coordinated rates and not competing with each other. Therefore, firms selling antiquarian and rare things had simply no choice and within the six years while the secret agreement was working, they had to overpay to the both companies hundreds of millions of dollars. This May, both heads of the auction houses were called to a big jury in New York that officially accused them of violation of the anti-monopoly law. However, only Alfred Taubman appeared before the trial. Anthony Tannant was lucky to possess English citizenship, so he cannot be extradited to the US, because when the two magnates were committing the criminal violation of the anti-monopoly law was not considered to be a criminal in Great Britain. And besides, US officials who investigated the case concluded that namely Taubman had organized the criminal operation.
The main witness for the prosecution was the ex-president and director general of Sotheby’s, Diana Broocks, who admitted that Toubman had ordered her to conclude the unlawful bargain with Tannant. Although Taubman’s advocates tried to accuse Mrs Broocks herself, their attempts were not successful.
Seventy-six-year-old Alfred Taubman still has controlling interest in Sotheby’s. He was invited to lead the auction house in 1983, when the company was threatened with hostile take-over. At that time, Taubman managed to defend finance independence of Sotheby’s, though as a result of the measures he took he practically became the company’s owner.
Of course, Taubman had come to business much more earlier. He had been growing in a Jewish family in Michigan, at the time of great depression. He had inherited his father’s building firm, though already before it he had given up university to go to the Army. After his leadership, his father’s small company turned into an empire of trade centres. His vacant time Taubman used to create a professional football club and to marry ex-Miss. Israel. The Michigan university Taubman has never finished was called after his name.
Long before the trial, another court confirmed a out of court settlement of this case: Sotheby’s and Christie’s should pay 537 million dollars to the firms that suffered as a result of unlawful agreement, while Sotheby’s admitted its guilt of the secret bargain and had to pay a 45-million-dollar fine. Christie’s that agreed to co-operation with the investigation got immunity from criminal prosecution.
Andrei Ivochkin PRAVDA.Ru
Read the original in Russian: http://www.pravda.ru/main/2001/12/07/34635.html