Sotheby's new directors come under the hammer

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The Independent Online

Sotheby's, the troubled auction house under investigation for price-fixing, is to face a testing time at its much-delayed shareholder meeting, to be held in New York on Thursday.

Sotheby's, the troubled auction house under investigation for price-fixing, is to face a testing time at its much-delayed shareholder meeting, to be held in New York on Thursday.

The group's largest independent shareholder, Baron's Funds, has already signalled it will oppose the appointment of Robert Taubman - son of the former chairman and largest shareholder, Alfred Taubman - to the board. But The Independent on Sunday has learned that Ron Baron, the head of Baron's, will also try and stop the appointment of two other directors, Max Fisher and the Marquess of Hartington.

The shareholder meeting was initially due to take place in London in April. Sotheby's had hoped to persuade shareholders to approve the appointment of a new, 16-strong board, to bolster the group. The auction house had been shocked by the resignations of both Alfred Taubman, who's controlled Sotheby's for more than two decades, and Diana Brooks, the high-profile chief executive, after it emerged that the US Federal Justice Department was investigating allegations that Sotheby's and its main rival, Christie's, had colluded to maintain commission levels on art auctions.

Christie's is understood to have passed internal memos to the Justice Department referring to the alleged price-fixing, in exchange for a conditional amnesty agreement. But the Justice Department has yet to win the co-operation of Ms Brooks with its investigation, despite intense pressure.

A class action against both auction houses has been launched, with the claims being co-ordinated by the law firm of Bois, Schiller & Flexner, which is famous for its success in antitrust actions against the computer giant, Microsoft.

One key piece of evidence in the class action has come from the documents passed to the Justice Department, which show notes from Christopher Davidge - who resigned as chief executive of Christie's late last year - to the former chairman of Christie's, Sir Anthony Tennant, mentioning talks with Mr Taubman about price-fixing.

Mr Baron, a high-profile figure who invited singing artist Billy Joel to perform at his investor conference last year, has built up an 11.4% stake in Sotheby's, making his funds the second largest shareholder after the Taubman family.

Mr Baron objected to the appointment of the younger Taubman, saying that he would have "enormous conflicts of interest". A spokesman for Mr Baron told The Independent on Sunday that he had not withdrawn his objections. Indeed, he had widened them. "Mr Baron remain dissatisfied about the independence of certain directors," the spokesman added.

Mr Baron intends to vote against the appointment not only of Robert Taubman but also Mr Fisher, a 91-year-old private investor who is a long- standing friend of Albert Taubman, and the Marquess of Hartington, the Queen's representative at Ascot and a former chairman of the British Horseracing Board. His objection to Mr Fisher is understood to be that he is not independent, and to the marquess that he lacks business experience.

The two are among a star-studded cast being proposed for the Sotheby's board this week. They include Conrad Black, the Canadian tycoon who owns The Daily and Sunday Telegraphs in Britain; Lord Blakenham, the ex-chairman of Pearson and MEPC, and Henry Kravis, the leveraged buy-out specialist and a well-known patron of the arts.

The meeting will be the first chance shareholders have had to question Michael Sovern, the former law professor and president of Colombia University, who has taken over as chairman of Sotheby's in the hope of putting the troubled auction house back on an even keel.

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