Your nation’s sovereign wealth fund makes a bond sale, earning billions of dollars. The money from this transaction gets banked into another account, which is later used to buy some of the world’s finest art from Christie’s. But three years later, things are coming apart. Sounds like something you’d see on film? Wait till you read this unbelievable story.
BACK in May 2013, there was a newcomer in New York’s circle of fine art collectors.
Eric Tan Kim Loong — currently under investigation in Singapore for links to state investment fund 1MDB — purchased over RM282 million worth of art at Christie’s through an account named Tanore in a single month. This is believed to be Tanore Finance Corp, the very same entity which transferred approximately RM2.6 billion to Prime Minister Najib Razak‘s personal bank accounts in March 2013.
Tanore’s generous bids made a strong impression on the collecting scene when it offered a record-breaking RM195 million for Jean Michael Basquiat‘s Dustheads.
Tanore’s bid also drove up the prices of the late Basquiat’s work.
Prior to the purchase, the highest amount paid for a Basquiat was RM105 million. After Tanore’s bid on Dustheads smashed his record, at least five other works by the artist sold for over RM100 million each in the past three years.
A month later, Tanore buys both Lucio Fontana‘s Concetto spaziale, Attese and Mark Rothko‘s Untitled (Yellow an Blue) for a whopping sum of RM318 million during a private sale.
Infamous entrepeneur Low Taek Jho was around for most of Tanore’s bids — a senior vice president at Christie’s who witnessed the sales believed that Jho Low might have been Tanore.
But towards the end of the year, Tan requested for a skybox (a private bidding space overlooking the auction for big bidders to entertain and party) at Christie’s with enough seating for twelve persons on 5 and 12 November.
The DOJ document notes that a Christie’s employee emailed a colleague stating, “It better look like Caesar Palace in there… The box is almost more important for the client than the art.”
— Artnet, 20 July 2016
During these sessions, Tanore bid RM22 million for Vincent Van Gogh‘s pen-and-ink sketch La maison de Vincent a Arles, a precursor to his famous painting The Yellow House.
The sketch, first mailed to Van Gogh’s brother Theodorus Van Gogh in 1888, accompanies a letter in which the artist describes the building that would soon become his studio.
Conducting fishy business at Christie’s
With the Van Gogh drawing however, there was a problem. The Swiss bank handling the transaction had compliance concerns and wouldn’t let Tanore’s payment go through.
Jho Low then takes over and immediately pays for some of the art that Tanore has bid on, but Tan also asks the auction house not to include Jho Low’s name in any of the paperwork.
A month later, Jho Low tells Christie’s to remove references to the Tanore account in his agreement to purchase the pieces.
After paying up for the Van Gogh, Jho Low received a number of artworks from Tan as “gifts”. Each came accompanied with handover letters which began with…
GIFT OF ARWORK(S) AS STATED BELOW IN CONSIDERATION OF YOUR FRIENDSHIP, YOUR CHARITABLE CONTRIBUTION TO THE WORLD AND PASSION IN PROMOTING THE UNDERSTANDING AND APPRECIATION OF ART WORKS.
…and ended with…
[…] SHOULD NOT IN ANY EVENT BE CONSTRUED AS AN ACT OF CORRUPTION SINCE THIS IS AGAINST THE COMPANY AND/OR MY PRINCIPLES AND I PERSONALLY DO NOT ENCOURAGE SUCH PRACTICES IN ANY MANNER WHATSOEVER.
Some of these prized, historic artworks were also given as a gift to film producer Joey McFarland, who runs Hollywood production company Red Granite Films with Najib Razak’s stepson Riza Aziz.
In February 2015, Jho Low was revealed to be the owner of Jean Michael Basquiat’s Dustheads, previously purchased by Tanore at Christie’s. He was also developing a reputation for buying paintings at eight-digit figures and swaying market trends.
But it was an alright year for him — the Mark Rothko painting he got through Tanore fetched RM186 million at Sotheby’s.
So what happened after all the drama?
Fast foward to today and Jho Low has sold many pieces from his highly-impressive collection apparently due to financial losses and pressure from ongoing 1MDB investigations.
In February, he privately sold off Dustheads for RM110 million while three pieces pledged to Sotheby’s for a RM400 million loan were among top lots at the auction house’s evening sale.
The trio however fetched less than RM240 million. It included works by Picasso and Claude Monet, sold at what was deemed “unusual” losses.
But two days ago, the U. S. and Switzerland seized Jho Low’s Van Gogh and two of his Monet pieces, namely Saint Georges-Majeur which was acquired from the Art Institute of Chicago for RM120 million, and Nympheas avec Reflets de Hautes Herbes that was bought from Sotheby’s for RM230 million.
All three pieces were alleged to have been obtained using funds linked to the Tanore account.
Elsewhere, latest developments in the 1MDB case include civil lawsuits filed in U.S. federal court against a group of individuals, including Abu Dhabi tycoon Khadem al-Qubaisi who formerly served as Managing Director at International Petroleum Investment Co (IPIC).
Also wanted is Mohamed Ahmed Badawy Al-Husseiny, ex-CEO of Aabar Investments and bogus company Aabar Investments PJS Limited which was contracted by the government for a debt repayment program in 2015.
Last year, Second Finance Minister Ahmad Husni Hanadzlah submitted a proposal to cabinet to restructure the payment plan for 1MDB’s RM50 billion debt. The proposal included the involvements of IPIC and its subsidiary Aabar Investments.