Cache of leaked documents reveal Sotheby’s owner Patrick Drahi’s $750m art collection—and his tax affairs


In 2019 the French telecommunications billionaire Patrick Drahi stunned the art world by buying Sotheby’s for $3.7bn (Sotheby’s was sold to Bidfair USA, a company wholly owned by Drahi) and taking it private. Now Drahi is the focus of something equally headline grabbing—the surfacing of a cache of leaked documents concerning his art collection, following a ransom demand by hackers.

The documents provide details not only of Drahi’s collection, but also of the arrangements around his tax affairs, and the extent to which he and his advisors were optimising these. The Swiss online publication, Heidi News, has seen the documents and is publishing an investigation, as is the French newspaper Le Monde.

In September this year the French site Reflets initially published ten articles based on the hacked emails. HIVE, the name of the hackers, were demanding €5m as a ransom from Drahi not to publish at least 140GB of data about his collection and various communications from his tax advisors.

Three of Drahi’s companies brought a complaint against Reflet’s company in the Commercial Tribunal of Nanterre, France, in September, alleging breach of commercial secrecy and “troubling public order”. The tribunal ordered Reflets not to publish any new information but allowed the existing articles to remain online. An appeal is scheduled for the 23 November.

While Drahi was described as a collector at the time of his acquisition of Sotheby’s, very little was known about what he collected nor the extent of his holdings. However, the leaked documents reveal the extraordinary quantity of prime quality art he has amassed, over the last seven years, much of it bought through Sotheby’s. Picasso, Magritte, Bacon, Marc Chagall, Dubuffet, Giacometti, Léger, Vasarely and Kandinsky are just some of the authors of works he owns. The prices range from €76.6m for Alberto Giacometti’s Grand Femme I, 1960,to €6,700 for a ceramic piece by Suzanne Ramié. Estimates of the value of the holdings are well over €750m.

Among the major pieces belonging to Drahi are Pablo Picasso’s Femme Turc au costume dans un fauteuil (1955), valued at €27m, Amadeo Modigliani’s Portrait of Jeanne Hebuterne sitting in an armchair (1918), €71m, and Francis Bacon’s Triptych inspired by the Oresteia of Aeschyluss (1981), €75.2m. There is another Giacometti, Femme de Venise II (1956-57), valued at €13.3m, and René Magritte’s Le domaine enchanté (V) (1953) acquired by private sale from Sotheby’s New York for $8.9m in 2020. Jean Dubuffet’s, La tasse de thé V (1966) was bought in June 2015 for $1.1m. Then there were two Gerhard Richter Abstraktes Bild paintings, one yellow, one red, with their prices given as $2.9m and $3.9m. Other works cited by Heidi News are Marc Chagall’s Crépuscule ou la maison rouge (1948), bought for $5m, and Fernand Léger’s Le corsage rouge (1922), $17m.

From Asia comes a Ye Liu, Leave me in the dark (2008), for €5.5m, and a large longquan celadon vase bought for €842,183.40. There is also a Giovanni Battista Tiepolo Madonna of the rosary with angels (1735) that cost €15.7m. But the vast majority of the collection consists of Modern and Impressionist art, from Barbara Hepworth The family of man, 12, purchased for €4.8m, to Egon Schiele’s Dammernde Stadt (1913), bought for €25m.

At least 25 works of art were bought from Sotheby’s between 2015 and 2020, according to another inventory, which contains handwritten notes in blue pen, noting where they could be placed in Drahi’s Swiss residences.

As a private company, Sotheby’s only publishes its sale results but not profits, but for the year 2020 its top lot was the Francis Bacon triptych bought at auction for $84.5m. It carried an in-house guarantee; until now the buyer had not been identified. The record price raises questions about how this price was achieved, and whether the buyer benefited from the terms of the guarantee. Such sales inevitably boost the firm’s reported sales figures.

Much of the collection was stored in the armoured warehouse of the Geneva freeport, in Grand-Lancy, beside the airport. While in the freeport they would not attract 7.7% Swiss VAT, but should they be moved into Drahi’s multiple homes this would be payable. For example, in the case of Drahi’s Zermatt chalet, works worth €65m were destined (according to what are thought to be Drahi’s handwritten notes) to be hung there, which would have attracted €5m VAT. His two Cologny houses were noted as possible destinations, too, for another €312m worth of art, potentially attracting €24m VAT.

He was advised by the Geneva tax advisors Oberson and Abel that he could rent the works from Before SA, which would enable him to get a refund of VAT. Another solution they suggested was a “temporary import”—permitted for two years, which could be prolonged for a third.

Oberson and Abel proposed to write to the Geneva customs authorities requesting exemption from VAT. Heidi News asked the Swiss authorities whether this proposal was accepted, but has not received a reply. The documents show Drahi’s advisors exploring the possibilities of his home being used regularly for business purposes, with works of art displayed as potentially for sale, or the creation of an adjoining gallery annex with some measure of public access, in order to reduce the VAT burden. There is no documentary evidence that Drahi took the Geneva firm’s advice, although they did write to the tax authorities along these lines.

According to Heidi and Le Monde, Drahi initially owned some 200 works of art through his Luxembourg-registered company Before SA, and because of this would not be liable for capital gains tax when he resold them or gave them to his children. However, this possibility changed in January 2022 when the European Union adopted a new directive, ATAD2 (Anti Tax Avoidance Directive), notably targeting Luxembourg and the Netherlands.

Perhaps in anticipation of this change in regulations, a few months before, on 29 October 2021, ownership of the collection had been transferred to two companies in St Vincent and the Grenadines, a Caribbean tax-haven, called Angelheart Ltd and Forever Ltd. The group was initially valued at €764m, but in order not to attract capital gains tax, the valuations were subsequently reduced. In March 2022 the valuations were revised and lowered to €717,023,825. When existing losses on other items were taken into account, no capital gains tax was due on the transfer. It is unusual for such a valuation to be carried out in-house, rather than by an outside, accredited expert. Professor Roman Kräussl, from the department of finance at the University of Luxembourg, commented: “You just cannot do this sort of evaluation internally, you need an independent, external specialist and preferably more than one. Otherwise there is such a risk of underevaluation which could lead to problems with tax.”

At the time of publishing, Drahi had not responded to questions from The Art Newspaper. He and his advisors did not respond to 31 precise questions sent by Heidi. However they did say: “Mr Drahi does not comment, confirm or reject allegations relative to his private life, to his children or his religion,” adding: “Mr Drahi and his family have always paid taxes which were due, in conformity with the applicable regulations in the countries concerned.”


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