Commission a fake antiquity that if authentic would be illegal to trade or sell, get it appraised by experts who work for a national museum, and use it as collateral for a $100 million loan to buy real estate. Of course, if it did sell at auction, the buyer would never actually pay. Sounds a bit like our own financial markets here!
In one case that was recently exposed, businessman Xie Genrong commissioned a fake ancient jade burial suit made out of pieces of jade stitched together with gold thread. He got five top expert appraisers to vouch for the authenticity of the suit and value it at $375 million. Using that as collateral, a bank gave Xie a $100 million loan for a real estate project.
This saga casts doubt on the role of the appraisers, who work for such august institutions as Beijing's Palace Museum. Of the five, one has since died, and the other four have blamed him, saying they had to carry out the appraisal of the suit without touching it, while it was in a glass case.
But Zhang Ning, a porcelain appraiser who does not specialize in archaeological objects, says such a valuation should never have been given for a jade burial suit: "For a start, it was violating the law. If it had been unearthed in a dig, there's a law that says archaeological objects can't be traded or sold. So the experts should have never given it that estimate. It's likely the experts knew it was fake."
The businessman, Xie Genrong, is now serving a jail term.
Many are now arguing for reform of China's auction law. One major issue is that Chinese auction houses are not responsible for the authenticity of the goods they sell, as long as they issue a disclaimer. But the problem is that the fakery is endemic. In all too many cases, the art is fake, the bids are rigged, the experts are crooked, and the bills are never settled. It's difficult to know what is real, aside from the corruption.