Chinese Art Auctioneer Poly Group Funds Chinese Liberation Army

Corruption in China's Auction Houses? Hardly a Shock

While its no big surprise that rampant corruption  exists in the Chinese Art market, in particular within auction houses owned and run by the Chinese themselves. What might be a real shock is the largest Chinese based auction house was started by the Peoples Liberation Army as a funding source for the Military.  The Poly Group is just such an organization. Poly is now the third largest auction firm in the world.  Do Chinese buyer's mind? Not a bit. Despite the fact the auction house turns a blind eye to pumping fakes into the market.

Here is a recent article published in the Wall Street Journal, its an interesting read.

'Lotus Screen,' by Yang Feiyun, $2.7 Million

From Arms Dealer to Art Dealer - WSJ.com

Inside a stuffy hotel ballroom in Beijing earlier this month, Zhao Xu was too anxious to remain in his seat as "Beijing 2008," a painting by Chinese artist Lui Liu, came up for sale.

Mr. Zhao, the 43-year-old head of China's Poly Auction, smoked cigarettes feverishly in the corner as bidding on the painting—one of the night's most anticipated works—opened at a sky-high 16 million yuan ($2.6 million). But in less than three minutes, Mr. Zhao could relax. The painting, which depicts five partly nude women at a mah-jongg game, sold for $2.7 million, proving that the Chinese art market was alive and well.

"I'm happy," Mr. Zhao said later in the evening. In Poly's first four days of a six-day sale, it sold $322.6 million worth of collectibles—just shy of Christie's four-day sales total of $333.8 million in Hong Kong this fall.
In less than seven years, Mr. Zhao and Poly Auction have risen to become unlikely major players in the art world. Controlled by Chinese state-owned conglomerate China Poly Group—which began as a unit of the People's Liberation Army—Poly Auction is China's largest art auction house and the world's third-largest peddler of valuable collectibles, after Christie's and Sotheby's BID +1.35% .