[NetBehaviour] Panama Papers expose art world's offshore secrets (fwd)

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The International Consortium of Investigative Journalists
(ICIJ) has turned its attention to the art world in its
ongoing examination of documents leaked from Mossack
Fonseca, a Panama-based law firm specialising in wealth
management. The ICIJ has revealed that a painting by
Modigliani that is being claimed by the grandson of Oscar
Stettiner, a Jewish gallery owner whose art was seized by
the Nazis, is owned by a company controlled by the Nahmad
family of art dealers, who have previously denied that the
work was in their possession. Modigliani 's Seated Man with
a Cane (1918) The canvas in question, Seated Man with a Cane
(1918), was bought by the Nahmads at auction in 1996,
reports the ICIJ. They paid just over 2m for the painting at
Christie's London in June of that year. In November 2008,
the Nahmads tried to sell the work at Sotheby's New York
with an estimate of $18m to $25m, but there were no bids on
the canvas. In 2011, Philippe Maestracci, Oscar Stettiner's
grandson, sued the Nahmads in US federal court for the
return of the Modigliani; the suit was withdrawn after the
Nahmads said that the painting was owned by a company called
the International Art Center and not by them. Three years
later, in February 2014, the administrator of the Stettiner
estate sued the Nahmads again, arguing that the
International Art Center is a Panamanian shell company,
which is an "alter ego of David Nahmad and other Nahmad
family members", according to the court papers. "The Nahmads
have insisted in federal and state court in New York that
the family does not possess the Modigliani," the ICIJ
reports. But the leaked Mossack Fonseca documents show that
"the Nahmad family has controlled the Panama-based company
International Art Center (IAC) for more than 20 years...
David Nahmad, the family leader, has been the company's sole
owner since January 2014", the ICIJ reports. Mossack Fonseca
first set up the IAC for the Nahmads in 1995. When the ICIJ
confronted David Nahmad's lawyer, Richard Golub, with
documentation showing that the Nahmads own the International
Art Center, Golub said: "Whoever owns IAC is irrelevant. The
main thing is: what are the issues in the [ongoing] case,
and can the plaintiff prove them?" The Ganz auction The ICIJ
has also shed new light on an auction of Modern art at
Christie's New York in November 1997. The sale of work
collected by Victor and Sally Ganz included pieces by
Picasso, Jasper Johns, Robert Rauschenberg and many others.
It made a then record $206.5m and "proved a milestone in the
transformation of art into a global commodity", the ICIJ
writes. The Mossack Fonseca papers show that many of the key
works in the Ganz collection were sold six months before the
Christie's auction to a company called Simsbury
International Corp. This was set up in Niue, an island in
the South Pacific, and administered by Mossack Fonseca. The
works were sold to Simsbury for $168m from Spink & Son, the
London auction house then owned by Christie's, according to
the ICIJ. The man who controlled Simsbury was the British
billionaire Joseph Lewis, who was then the richest man in
England and the largest shareholder at Christie's. The terms
of the deal stipulated that the Simsbury-owned works would
still be offered for sale as part of the Ganz collection at
Christie's: if they made more than Simsbury had paid for
them, Lewis and Spink & Son would share the difference, the
ICIJ reports. The Ganz family and Lewis declined to speak to
the ICIJ about the revelations. Agents to the art world The
offshore dealings of other major art collectors are also
detailed by the ICIJ. Mossack Fonseca's records mention
"enough art to fill a small museum", they report. Chen
Dongsheng, the founder and chairman of China Guardian, the
world's third biggest art auction house after Sotheby's and
Christie's, and grandson-in-law of Mao Zedong, is one of
many rich Chinese businessmen and political leaders who have
moved assets offshore. He is the sole director and
shareholder of Keen Best International Limited, a company
set up by Mossack Fonseca in the British Virgin Islands in
2011.

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