Mr Tomonori Tsurumaki bought it in December 1989 at a sale mounted by the Paris auctioneer Jean-Claude Binoche in collaboration with Tokyo's Fuji TV Gallery. Salerooms in Paris and Tokyo were linked by satellite in a gala venture characteristic of the late 1980s art boom. Today Tsurumaki's creditors are prepared to take a mere 6bn yen for the painting, according to the Fuji TV Gallery's director, Mr Suzumi Yammamoto.
Yammamoto is a cosmopolitan dealer who represents some of Japan's best contemporary artists and has been dealing in 20th-century European paintings for more than 20 years. With the unshakeable backing of Japan's largest television company - his gallery is tucked into a wing of the Fuji TV headquarters - Yammamoto is one of the few survivors of the vertiginous collapse of Japan's art market.
As we sipped green tea from lacquer bowls in his private office, he explained the scale of the disaster. He had personally been approached in the course of 1993 for advice on the resale value of more than 400 Impressionist and modern paintings; all had been ceded to financial institutions by bankrupt art investors.
The Picasso was one of the most sensational examples of a common problem. It was briefly the star of a museum that Tsurumaki built in the middle of his motor racing track, Autopolis, in Kyushu, the southernmost island of Japan's archipelago - each attraction was supposed to bolster the other. It was a remarkable little museum, according to Yammamoto, containing a strong showing of Bonnard and Vuillard - Tsurumaki's favourite artists - and a representative sprinkling of other famous names, such as Cezanne, Van Gogh and Gauguin. But Autopolis went bankrupt and the paintings have landed in the hands of the Mitsui Trust and the Lake Company, a firm of moneylenders who staked Tsurumaki's purchase.
The Lake Company did a thriving business in the 1980s, with branches throughout the country providing high-interest loans to speculators who hoped to make a killing in financial markets, real estate or art. But the return of economic sanity - known in Japan as the collapse of 'the bubble economy' - has left high-interest moneylenders in trouble. Mr Takeo Hamada, who built up the Lake Company, has recently been ousted as chairman and nobody seems to know the fate of the collection of more than 40 paintings by Georges Braque he bought for the company.
Another famous moneylender, Yasumichi Morishita, who scared Christie's stiff in 1988 by acquiring 7 per cent of its shares, has recently ceded the shareholding to the Chiyoda Life Insurance Company. Chiyoda provided Morishita with capital to relend, just as Mitsui did with Lake.
During the boom years Morishita was a familiar figure at auctions in London and New York, accompanied by a beautiful daughter with waist-length hair and a bouncing young assistant called Kiyotaka Kori; Kori and the beautiful daughter ran Morishita's art subsidiary, Aska International, which was often the top purchaser at Sotheby's and Christie's auctions. Aska International's paintings are now back on the market, according to Yammamoto, having also been ceded to creditors.
Most of the paintings that have landed in the hands of financial institutions since the market broke in 1990 are not, however, for sale. Thousands of Impressionist and modern paintings are stored in Japanese bank vaults. Most of them appear in the books of the financial institutions at cost price - and prices in Japan in the late 1980s were often three or four times higher than in London or New York, since local dealers had a stranglehold on the market. Selling their art at today's prices would involve the institutions in recording large book losses and, at present, they prefer to keep the art instead.
Sotheby's former representative in Japan, Mrs Kazuko Shiomi, told me Japan's art mountain would not begin to be released on to the market until there was an upturn in the national economy. Japan is currently in the grip of its worst ever recession and financial institutions cannot afford to show the losses on art loans in their accounts. Mrs Shiomi, who split with Sotheby's three years ago, is one of Tokyo's best connected businesswomen. She is currently managing director of a foundation that buys Stradivarius violins and other great musical instruments to lend to Japanese performers.
She is also the president and - so far - sole employee of World Auction Ltd, a company that has been established to help Japanese financial institutions sell their art when the time comes. It is backed by Wildenstein's, the world's richest art dealers, and the Paris auctioneer Guy Loudmer, thus assuring Mrs Shiomi very substantial capital backing as well as retail and wholesale outlets in the West.
But the time for selling has not yet come, and the Japanese art market continues to limp from one disaster to another.
Leading modern picture galleries from Tokyo, Osaka and Kyoto have been reported to the justice department for tax evasion this year; the Fujii Gallery of Tokyo is reported to have concealed 2.5bn yen (pounds 12.5m) of income, the Umeda Gallery of Osaka 1.2bn yen (pounds 6m) and Shibunkaku of Kyoto 1.44bn yen (pounds 7.2m). Kazuo Fujii, a former president of the Tokyo Art Dealers Association, was arrested and charged with fraud last month, despite having paid back taxes and fines. It is widely expected that he will serve a prison sentence.
The art world has also been shaken by the arrest of Ryoei Saito on suspicion of passing a bribe of 111m yen (pounds 625,000) to the governor of Miyagi prefecture to facilitate the progress of property developments. Saito paid the highest auction prices ever recorded for paintings in May 1990: dollars 82.5m (pounds 49.5m) for Van Gogh's Portrait of Dr Gachet and dollars 78.1m for Renoir's Au Moulin de la Galette. He is chairman of the Daishowa paper manufacturing company and one of Japan's richest industrialists.
Despite trading problems at Daishowa, there is no word of Saito's Van Gogh or his Renoir coming back on to the market. Saito, 77, is thought to have bought the paintings to help reduce the inheritance tax which will be levied on his fortune when he dies. He borrowed the money for the pictures against his extensive real estate holdings. It is a convention in Japan that real estate is valued for inheritance tax at roughly one-fifth of its market value; an oustanding debt of pounds 100m would thus wipe out inheritance tax on roughly pounds 500m worth of property.
The Japanese art market outlook is not, however, one of unalleviated gloom. The contemporary art mogul, Masami Shiraishi, told me that Japan has 88 museums which are still spending an average of pounds 1m a year each, with at least pounds 8m going on contemporary art. Shiraishi runs the annual contemporary art fair in Yokohama, the new Penrose Institute of Contemporary Art in Tokyo and a commercial gallery in a 200-year-old converted bath house in Tokyo's Ueno district. He regards teaching the Japanese to enjoy art in the contemporary international style as a mission.
It is going to take some doing. What Japanese collectors really like are the home-grown schools of painting known as 'yoga' and 'nihonga'. Yoga means oil paintings in the styles of the Impressionists or early 20th-century Europeans - and there are still many practitioners at work. Nihonga means modern Japanese paintings which use the traditional medium of water-soluble paint on paper or silk. According to the magazine Nikkei Art, these are the fields preferred by 50 per cent of Japan's collectors.
In 1990 a group of dealers started an auction house called Shinwa, modelled on Sotheby's and Christie's, which specialises exclusively in yoga and nihonga paintings.
According to Shinwa's chairman, Tatsuo Hirano, there are always takers for this kind of picture if you get the price right. Seventy per cent of the 97 paintings he auctioned in December found buyers, bringing in roughly pounds 2m. The prices were between one-third and one-fifth of those current in 1990: Shinwa had reduced its expectations after a poor sale in September. Nevertheless, a 1960 yoga still life of a Noh mask and a pile of music manuscripts by Hanjiro Sakamoto - a highly regarded artist, recently deceased - made 104m yen while a conventional study of a red peony by a living practioner of nihonga, Toshio Matsuo, found a buyer at 2.1m yen. -
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