Quantcast
Art News
 Auctionata, Auction Atrium
Auctionata Accused Of Shill Bidding And Other Trade Violations - ArtLyst Article image

Auctionata Accused Of Shill Bidding And Other Trade Violations

06-04-2016
 
Bookmark and Share

The Berlin-based online art auction company Auctionata has been accused of shill bidding and other trade violations. The German business magazine Wirtschaftswoche has revealed that an audit by the accountancy firm KPMG in January 2015 found that CEO Alexander Zacke and his wife Susanne Zacke engaged in auctions on the Auctionata website, using registered pseudonyms as well as their own names.  

Wirtschaftswoche alleges that the employees also consigned works of art at inflated valuations in exchange for "substantial" advances. The report went on to say that management was able to "operate relatively freely without significant control." The company audit also alleges that board members, investors, and even employees bought works via the site, which is in violation of trade regulations for auctioneers.

This is not the first time there has been a scandal associated with Auctionata. In 2014 Auctionata hired Allison Earl Woessner as their UK Auction director. Woessner was the disgraced former CEO of London’s Auction Atrium, a company that went into voluntary liquidation owing clients and claimants in excess of £125,000. As it turned out, several clients and debtors were never paid for the sale of goods consigned to Auction Atrium, which included a valuable Chinese porcelain vase, sold for £45,000, in the online auction's Autumn 2011, Oriental sale. Proceeds from other sales which consisted of family heirlooms, art and jewellery also went unpaid to the consignees. Auctionata added, "Allison Earl Woessner only worked for Auctionata for a few months. Both then and today, Auctionata AG stands in no association with the company Auction Atrium."

CEO Alexander Zacke said the suggestion that his bidding activity on Auctionata was to inflate auction prices was nonsense. “That's totally out of the question," he told Artnet. “Our bidding activity in 2013 and 2014 during which we bought some paintings and other things was to decorate our Berlin apartment; others also made purchases for similar reasons.” He added that the practice no longer took place. "It was a mistake that in hindsight I wouldn't do again today." Auctioata told our reporter:"

The compliance team at the time, the employees, the management and the supervisory board members of Auctionata AG have since then worked closely together in order to systemize and professionalize the internal structures on the basis of the resulting audit report. The goal was to improve internal company standards on the basis of this report and to prepare for a potential IPO. “The rapid growth of Auctionata made us soon realize that we could not continue on as a young startup could. For that reason, the management ordered a full-scale compliance audit. Wherever our standards were found to be lacking, we rigorously changed them,” says Alexander Zacke, Founder and CEO of Auctionata.

Auctionata told our reporter; "Since the submission of the KPMG report in January 2015, Auctionata has carried out regular internal audits on the basis of its findings and all the issues raised by the report were addressed between 2014 and 2015. The report merely warned the management that investigations could be faced, had the management not taken the necessary steps towards full compliance. The auditors and supervisory board confirmed without restriction that all consignments by Auctionata employees or board members in the referred timeframe were found to be proper".

The KPMG report states that Auctionata faces fines, a revocation of its trade license, and significant reputation damage. In the worst-case scenario, the company "may not be able to continue business operations.” Additionally, the KPMG report listed a series of almost 600 items consigned to Auctionata by the Zackes between 2013 and 2014, with an aggregate value of over €500,000 ($569,440). The report alleges that the Zackes were paid "substantial" advances, and that some consignments were based "on missing, incomplete, or unsigned consignment contracts." The auditor added that "the valuations of the objects," were sometimes questionable. According to the weekly financial journal, the online auction house permitted employee submissions but the imposed €50,000 ($56,944) limit didn't apply to members of the board. Auctionata told Artlyst that," The KPMG Governance and Compliance report was voluntarily commissioned by Auctionata’s management, in close consultation with the supervisory board. The report refers to the early stage of the company, i.e. early 2013 and 2014. All the material for the basis of the evaluation by the KPMG auditors was submitted by the Auctionata AG management on their own account and entirely voluntarily.

Dr. Christian Nagel, Chairman of the Auctionata Supervisory Board and Partner of Earlybird, comments: "The Supervisory Board, which represents the investors, was fully informed about the entire compliance process at all times. The commitment and achievements in meeting highest compliance standards are exemplary. Not least due to this reason, the management of Auctionata has earned the full trust of the Supervisory Board." 

Auctionata, who have been preparing to go public may now delay this until a future date. The accuracy of the company's financial figures on 8 March showed revenues totaling €81 million ($92.2 million) with 249 auctions in 2015, equating growth of 165 percent compared to the previous year.

 


Subscribe to our weekly newsletter

* indicates required

Email Format

View previous campaigns.

Crossroads Art Show 2016 - 6-9 October - The Old Truman Brewary
Artlyst Quiz
Advertise with Artlyst

FACEBOOK FEED

ICA
Canvas Bar
Camden Arts Centre
Art Below
Guardian Select
Button Advertise
Top 10 Exhibitions
Top 10 Emerging Exhibitions