Unlock Editor's Digest for free
Roula Khalaf, editor of the FT, picks her favorite stories in this weekly newsletter.
Russian billionaire Dmitry Rybolovlev said he relied on Sotheby's documents to make art purchases even as concerns grew about the high prices he was being offered, as he testified this week at a trial in a lawsuit he filed against the auction house in New York.
In the lawsuit, Rybolovlev is seeking $377 million in damages from Sotheby's, accusing the company of being involved in a years-long scheme by Swiss art dealer Yves Bouvier to sell him art masterpieces worth hundreds of millions of dollars – including Leonardo Da Vinci's “Salvator Mundi” – to inflated ratings.
“We completely trusted Bouvier and trusted Sotheby's. We couldn’t even imagine that Sotheby’s could participate in something like that,” Rybolovlev said, testifying through an interpreter.
“When the largest company in this industry with such a strong reputation takes such actions, it makes it incredibly difficult for customers like me. . . to understand what’s going on,” Rybolovlev said. “It is important that the art market becomes more transparent.” . . Customers have no chance.”
Rybolovlev testified that documents provided to him by a Sotheby's representative who had worked closely with Bouvier on several sales were crucial to his confidence in the prices he paid for the artwork.
However, Sotheby's lawyer portrayed Rybolovlev, the owner of AS Monaco football club, as a competent and experienced businessman with experience in due diligence on important financial decisions.
In his testimony, Rybolovlev described his rise from a medical student in the former Soviet Union to a business tycoon with a fortune of $7 billion and provided insight into the emergence of oligarchs as Russia transitioned to a market economy after the collapse of the Soviet Union.
Rybolovlev said that given the size of his investments and corporate holdings, he relies on deputies to handle the logistics of his art purchases.
Marcus Asner, a lawyer for Sotheby's, asked Rybolovlev if he thought his deputy did a poor job given the estimated $500 billion to $1 billion. Rybolovlev believes he paid too much for his art collection in a decade of working with Bouvier. “Let’s just say there’s room for improvement,” he replied.
Asner noted that documentation provided by Sotheby's regarding the authenticity of the “Salvator Mundi” – which Rybolovlev cited as crucial to his decision to buy it in 2013 for $128 million – also helped him sell the painting through Christie's in 2017 resold for $450 million, breaking auction records.
Sotheby's rejected Rybolovlev's claim that the art world should be more transparent, pointing out that his ownership was not disclosed at the time of the sale.
In a statement following Friday's testimony, the auction house said: “It was clear throughout Mr. Rybolovlev's testimony that, as a self-made billionaire with a diverse and extensive network of interests, he lacked the care and attention to detail with which He kept himself busy.” Shops were given to his art shops.”
Bouvier is not a defendant in the Sotheby's trial and has maintained his innocence in his art sales to Rybolovlev. He settled a legal dispute with the billionaire in Switzerland last month, and other cases in various jurisdictions have been settled or dismissed. A representative for Bouvier said: “The allegations made against Mr. Bouvier in the New York trial have already been rejected by authorities around the world.”