from the pen... Van Gogh, Sotheby's, Mugabe

Accountancy SA,  Sep 2007  by Julies, Raina

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It is widely believed that Vincent Van Gogh only ever sold one painting in his life time. It's so widely believed that even a major insurance company created an entire marketing campaign around this 'fact'. But we know, that there is strong evidence that suggests that he in fact sold several works during his lifetime.

John Leighton, director-general of the National Galleries of Scotland adds: The story that Van Gogh sold only one painting during his lifetime is a myth, he sold several. The point is that although there may be only one firmly documented sale of a painting, there were almost certainly other sales including drawings and of course Van Gogh swapped his work with other artists and even carried out a few commissions. In commercial terms hardly a huge success but not quite the one sale of the myth".

In 1987, Sotheby's, by auction, sold one of Van Gogh's 'Irises' paintings for US$53.9 million. At that time, it was recorded as the highest ever price paid for a painting. It turned out though that Sotheby's had 'loaned' the buyer, Australian publishing and brewing magnate, Alan Bond, half the amount of the winning bid.

Of course the art world was in uproar. Did Sotheby's directly manipulate the value of future artworks it was to sell? Was Van Gogh's painting genuinely worth that record amount? Did Bond or did Sotheby's actually own the painting after the sale? Of course, you will know that the United States Department of Justice, after extensive Investigations, Indicted Sotheby's for price-fixing.

All of this coincidentally happened after the Reagan administration's 1986 Tax Reform Act changed the law so that art donors could not deduct the full value of works given to museums.

Twenty years later, on a different continent and under seemingly different circumstances, Robert Mugabe, by government decree, orders that all shop prices be cut by at least 50%. For the first time in decades, Zimbabweans shop up a storm, buying big screen TVs for as little as £20. While this is something most of us would wish for, the reality is that shop shelves are soon cleared out And an even further reality Is that neighbouring states such as South Africa (SA) become shopping and refugee havens.

Mugabe of course believes this reduction in prices in Zimbabwe is a strategic move to decrease inflation, accusing business interests of fuelling inflation now running at about 4,500% (July 2007). Coincidentally, Mugabe's administration is said to be set to pass legislation that will effectively give a controlling stake in all publicly traded companies to ruling party loyalists and others chosen by the government.

Now the question to ask is this: does this economic crisis not yield disastrous effects for Zimbabwe and SA, as SA now bears the burden of even more cross-border flights, increased crime rate by oftentimes starving refugees, and a slow drain on our domestic economy?

Sotheby's, after pre-empting the negative effects that Reagan's tax reform would have on its industry, put in place a corrective measure, albeit an illegal one. But why does it seem that in SA, President Mbeki fails to see that, even if he does support what must be Mugabe's master plan for communist rule, some kind of strategy and deliverable timeline needs to be put in place so that either we ensure help for Zimbabwe's economic survival or ensure SA's domestic policy isn't damaged too severely.

Post the oil reserves issue, post land evictions, post apartheid era hosting, what remains is clear: Somebody needs to take a stand and act on that stand. It's not enough to just declare that elections must be free and fair. What happens between now and the March 2008 Zimbabwe elections?

Former president Nelson Mandela said in 1995, at the African Peace Award held in Durban, that Africans need to take care of Africa. It is precisely this kind of sentiment and our commitment to taking a stand that has seen SAICA adopt numerous projects that aim to put in place corrective strategies. The Thuthuka Small Practices project (Read about it on page 35) is one such strategy.

And surely, it is much too long overdue that our dear President endeavours to, as per SADC's mandate, right the wrongs currently being perpetrated on our erstwhile beautiful northern neighbour?

Raina

Editor

Copyright South African Institute of Chartered Accountants Sep 2007
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