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Minister warns Drouot: make major changes now or face nationalisation

22 October 2010Written by ATG Reporter

THE spectre of a nationalised Drouot haunted delegates at the Annual Congress of French auctioneers’ union SYMEV, held at Artcurial’s Champs-Elysées premises earlier this month.

In a barely veiled threat at the meeting held at Artcurial's Champs-Elysées premises on October 8, France's Justice Minister Michèle Alliot-Marie warned those who control the Paris auctions centre to get their act together, saying that it was down to Drouot's shareholders, rather than the government, to effect change, "unless nationalisation was considered".

Failure to "shake things up forthwith" would mean "we shall draw the appropriate conclusions", said the minister, and "everyone will face up to their responsibilities" during the parliamentary reading of France's new auction law, due by the end of the year.

Topping Alliot-Marie's list of demands is that Drouot breaks the stranglehold of shareholders who control voting rights – just five per cent – and opens the door to outside investment. Drouot's current shareholding rules are "incompatible with its economic development" and discourage investment, she told the auctioneers.

The minister also wants France's auction watchdog, the Conseil des Ventes – a body despised by most auctioneers – to have greater powers to prosecute those they suspect of breaching the rules; this, in spite of SYMEV president Hervé Chayette's insistence that "increasing constraints, regulations and surveillance could weaken, not boost, the French art market".

Alliot-Marie's also called on the Conseil to draft a strict ethical code for the auction profession, to take effect by autumn 2011.

Not every aspect of the forthcoming law change is unwelcome, however.

The minister announced that the leading change, in response to the European Union Services Directive, would make it lawful for French auction firms to negotiate private treaty sales.

And although there will be no review of import VAT, she suggested that France was ready to adopt a different stance on droit de suite, the artist's resale right, which she admitted "penalised" the French art market. She hinted at adopting a "more pragmatic" approach inspired by "our British friends".

The minister also announced the formation of a droit de suite working group within the Justice Ministry, and revealed that French Culture Minister Frédéric Mitterrand had recently asked the EU Commission to hurry up and produce its overdue report on the impact of droit de suite. The British Art Market Federation has already expressed its exasperation at the Commission's failure to live up to its legal obligations on this point (see ATG No 1948).

Alliot-Marie's speech rounded off a busy auctioneers' Congress that included presentations on the role of the Internet and how to adapt advertising to the written and digital media; and "round-table" (panel) discussions on the image of French auctioneers, communicating with the press, and "new governance for auction firms and topical questions depending on events".

The latter panel, chaired by ATG's Simon Hewitt, focused on the Drouot crisis, with SYMEV President Hervé Chayette calling for a "very firm reaction" from Drouot authorities, "over and above the symbolic measures already taken". He regretted that Drouot had refused to adopt SYMEV's Quality Service Charter, introduced in 2004.

Drouot President Georges Delettrez declined SYMEV's invitation to join the panel, but Drouot board member Gilles Néret-Minet, who faced angry heckling from the room over shareholder voting rights, gave an indication of how his fellow directors were thinking.

Reacting angrily to the minister's speech in a later press release, he robustly defended shareholders' rights to decide on the Drouot's future, but added that they were "not disposed to ignore the minister's invitation to re-examine the company's statutes", and were already planning to entitle personnes morales (legal entities) to become shareholders (as well as physical persons).

Referring to Alliot-Marie's plans to introduce an ethical code, Delettrez pointed out that auctioneers had a long ethical tradition, and can see "only advantages in formalising ancient unwritten rules which have proved their worth". Given Drouot's current predicament – one auctioneer charged with collusion for fraud and others under police investigation – the "worth" of such rules might seem open to question.

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ATG Reporter

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