Sotheby's faces new challenge

SOTHEBY'S may have overcome the bad publicity arising from a 1997 television expose that showed it arranging the illegal export of a painting from Italy for sale in London but is now facing a new challenge - dealing increasingly with clients from emerging markets where the traffic in art is often conducted in cash.

On 29 April, for example, a Prague-based academician and painter named Josef Salmon auctioned off a 19th-century Russian porcelain vase at Sotheby's in London.

On 28 May, Sotheby's sent Mr Salmon the proceeds of the sale, a cheque drawn on Barclays' Piccadilly branch for pounds 20,168.

On Thursday, Mr Salmon appeared in Sotheby's Prague office to ask if he could be paid in cash rather than by cheque - and for the payment to be made in London on his arrival this week.

Mr Salmon told the Sotheby's assistant that foreign currency cheques take a long time to clear the Czech banking system and that he needed the money for business in London immediately.

Sotheby's Prague rang Sotheby's London to ask what could be done for Mr Salmon. But because the phone numbers of Sotheby's London and The Independent on Sunday are similar, the Prague assistant reached this reporter by mistake.

I suggested Mr Salmon take his cheque to Barclays in London and present it for cashing. But the assistant said Mr Salmon was worried about how much time this would take. She wondered what more Sotheby's could do.

When I rang Sotheby's in London on Friday to ask what its policy was with regard to payments in cash, a spokesman said: "We pay in cash only in the most exceptional cases. When we do it, it's only in small amounts."

When I explained what had happened, the Sotheby's spokesman said he would investigate the matter further. Yesterday he rang to say that there was no story - nobody had done anything wrong.

"The assistant did exactly what she was supposed to," the spokesman said. "She rang London for instructions. If she had reached the London office, we would have told her to tell Mr Salmon to cash his cheque."

A spokeswoman at the Czech embassy agreed that foreign currency cheques took weeks to clear in Prague but said payment in cash in London to a Prague-based resident was "highly irregular".