Sotheby's extends pre-sale deposits
Sotheby's will continue to seek pre-sale deposits from potential buyers of not just premium lots but also all other categories to protect the auction house from buyers with bad credit records in the coming Hong Kong autumn auction.
In the first such move by an auction house or Sotheby's branch, buyers who are new clients or cannot provide financial guarantees or references should be prepared to pay a minimum of HK$200,000 before they can join the bidding.
For the more expensive items Sotheby's said it would reserve the right to seek a minimum deposit of HK$1 million from each prospective bidder. All deposits will be fully refunded without interest within 14 working days after the sale.
The move follows the requirement at the auctioneer's April sale of the first part of the Meiyintang collection of Chinese imperial porcelains, when potential bidders for some 20 lots paid deposits of HK$8 million.
Sotheby's Hong Kong is the first branch of the auctioneer to specify the exact deposit that it will require. The branch contributed to 16 per cent of the auctioneer's worldwide auction market last year, a significant jump from 2004's 4.9 per cent.
'We are the first to introduce this deposit system,' Sotheby's Asia chief executive Kevin Ching said. 'Other auction houses in mainland China and Hong Kong are also adopting this system.'
He said the deposit would apply to clients with whom the auction house was not familiar and those with bad payment records.
Ching denied that the extension of the policy to all categories was prompted by the emergence of mainland Chinese buyers who have become some of the world's most avid bidders in art auctions, but have a record of leaving without paying.
'This is entirely untrue. Chinese buyers might be slow in getting their money out of China but most of them are OK,' Ching said.
Sotheby's Hong Kong said it sued seven buyers in the past five years, which included people from mainland China, Hong Kong, Malaysia and elsewhere in Asia.
Another international auctioneer Christie's said in its coming autumn sale in November, it would uphold the deposit system introduced at its May sale. A potential bidder will be asked to pay a HK$1 million deposit for bidding a premium lot.