Sir Anthony Tennant, a former chairman of Guinness and a leading City figure, found himself at the centre of the alleged price-fixing scandal involving the Christie's and Sotheby's auction houses yesterday after fresh allegations emerged from the United States.
Federal prosecutors in New York have been told that the alleged scam operated by Christie's and Sotheby's can be traced back to their former chairmen. Sir Anthony was chairman of Christie's from 1993 to 1996. US retail tycoon Alfred Taubman resigned as chairman of Sotheby's in February.
Details of how the inquiry has extended to Sir Anthony were reported in yesterday's New York Times. While no wrongdoing has been formally asserted, the two auction houses are under suspicion for colluding on the commissions they charged sellers and buyers for a period going back at least to 1995 and possibly to 1992. It may be only a matter of time before charges are filed. They could entail massive fines for the companies and possibly jail terms for individuals.
Christie's won a promise of conditional amnesty in the case - protecting its own people from the threat of prison - by agreeing in January to co-operate with an investigation already under way for three years. Almost simultaneously, the then chief executive of Christie's, Christopher Davidge, stepped down. His opposite number at Sotheby's, Diana Brooks, resigned her post in February.
Citing unidentified sources, the New York Times said Sir Anthony and Mr Taubman met several times to discuss plans jointly to limit commissions and then instructed their chief executives - Mr Davidge and Ms Brooks - to execute them.
Mr Davidge appears to have been the prime source of this information for prosecutors. As well as telling them the history of what allegedly happened, he reportedly handed over a wealth of documentation, including letters and memos, as soon as Christie's offered its co-operation in the case. Those documents apparently support the argument that the two chairmen were at the origin of the scheme.
Neither Sotheby's, which is New York-based, nor Christie's, headquartered in London, offered direct comment on the revelations yesterday. However, one source close to the affair said the report in the Times appeared to be "spot-on". The source said: "I don't know who instructed who to do what exactly, but I do know that all those documents exist."
Sir Anthony, 69, did not return calls yesterday. An old Etonian, he was one of the most prominent members of Britain's brewing industry in the 1980s. A director of Grand Metropolitan for 10 years, he was chief executive of Guinness from 1987 to 1989 before becoming chairman until 1992. He is now deputy chairman of Arjo Wiggins Appleton and a senior advisor to Morgan Stanley Dean Witter.
Lawyers for Ms Brooks have reportedly indicated that, with some offer of immunity, she too would be willing to point a finger at Sir Anthony and Mr Taubman as the authors of the alleged price-fixing scheme.
Prosecutors are also investigating whether, as part of the secret deal, the two auction houses agreed that they should waive commissions for valuable clients and that, to make up for the shortfall in revenue, others should be made to pay commissions as high as 20 per cent.
Both houses, which are gearing up for the main New York sales in May, are meanwhile faced with a rising tide of civil litigation from former customers - sellers and buyers - who will contend they were swindled by the alleged scam. On Thursday, Christie's filed papers arguing against a proposal that former buyers and sellers be allowed to launch a class action.Reuse content