Complaint threatens auction business
Date: 31 Jul 2008 | | Views: 3416
OVER the past 10 years, Melbourne businessman Rod Menzies has worked assiduously - some might say ruthlessly - to build his art auction empire.
Today it stands on a precipice.
Following a report by the ABC's Four Corners program last night, rival auction houses are expected to lodge a formal complaint today with the Australian Competition and Consumer Commission against his Menzies Art Brands.
Four Corners said the complaint would be based on Menzies Art Brands's alleged non-disclosure of guarantees and ownership of some artworks presented at its auctions.
Solicitor Charles Alexander, who helped draft the complaint, told the program the practices of Mr Menzies's auction businesses "have the potential to be misleading and deceptive conduct contrary to the provisions of the Trade Practices Act".
The practices are alleged to include selling and rebuying the same paintings at auction, publishing questionable provenance notes for paintings in catalogues and obscuring ownership details.
Academic and art valuer Meaghan Wilson-Anastasios said if the industry claims about Mr Menzies were true, "then he has dramatically inflated the Australian art market, and with it inflated buyer confidence".
She told the program: "If he's done that to advance the interests of his auction houses, then that buyer confidence has in a sense been artificially inflated. It's not based on real market performance, it's based on something that doesn't actually exist.
"So he has essentially put in place, or contributed to, the factors that could pre-empt a market collapse."
Mr Menzies, who owns one of Australia's largest industrial cleaning companies, told the ABC the cornerstone of his success in the art business was his integrity and that of his staff. This was supported by the thousands of contented buyers and sellers who had bought or sold paintings through his business, he said.
In recent months, The Australian has asked questions of Mr Menzies in relation to some of his auction sales.
ACCC chairman Graeme Samuel told The Australian last month his organisation would consider action if the auction house was shown to have "published material he or she either knows to be misleading or deceptive, or in doing so with such a lack of care or regard for the accuracy they have abrogated their responsibilities".
This followed a report that Lawson-Menzies, part of Menzies Art Brands, appeared to have overlooked important provenance information on a Rover Thomas painting listed for its June auction. Lawson-Menzies withdrew the painting from sale the day after The Australian raised industry queries.
Mr Menzies has been open in his desire to knock off Sotheby's from its No1 market perch. Last year, his two businesses sold a combined $64.4 million of art at auction, blitzing Sotheby's by more than $12 million.