Top 2 Sotheby’s Executives Quit Amid Inquiry on Commissions

Sotheby’s Holdings Inc. said Monday that its two top executives stepped down as an antitrust probe involving the high-brow auction house and its main rival, Christie’s International, widened.

The company said A. Alfred Taubman stepped down as chairman of the 225-year-old auction house and Diana Brooks resigned as its president and chief executive.

“My decision is a very difficult one, but I have taken it in the best interests of the company and of my colleagues,” Brooks said in a prepared statement.

The company, which has its principal salesrooms in New York and London, added that the British Office of Fair Trading and the Australian Competition Commission had each started an inquiry into alleged price-fixing of commissions. The Antitrust Division of the U.S. Department of Justice and the European Commission have already launched investigations of dealers and auction houses, including Sotheby’s and Christie’s.

“We are aware of action taken abroad and are looking at it here. We are making inquiries, but have no further comment,” Office of Fair Trading spokesman Mark Kram said.

Sotheby’s said the Justice Department investigation has reviewed whether Sotheby’s and Christie’s, the world’s two leading art auctioneers, had any agreement regarding the amounts charged for commissions in connection with auctions. Sotheby’s said it recently met with the Department of Justice to discuss “a prompt and appropriate resolution of this investigation.”

Although the outcome of the government inquiries, as well as a slew of class-action lawsuits that have been filed in the last month, have yet to be determined, the company said the matters “could well have a material impact on Sotheby’s financial condition.”

Taubman, who took the helm at Sotheby’s in 1983, owns 22% of the company’s outstanding stock and controls 63% of its voting power. Brooks, who joined Sotheby’s in 1979, had been president and chief executive since 1994.

A Sotheby’s spokesman said Taubman’s voting power remains unaffected by his resignation and he will keep a seat on the board. He declined to provide further details regarding the resignations.

Sotheby’s said Michael Sovern, a former president of Columbia University in New York, will serve as the new chairman of the board. William Ruprecht will become president and chief executive. Earlier this month, Christie’s said it told the U.S. Justice Department that behavior by previous management might be relevant to the government’s probe into alleged price-fixing of commissions in the art world--a disclosure that appeared to give fresh life to the investigation that began in 1997.

London-based Christie’s changed hands in May 1998 when French businessman Francois Pinault purchased the company for $1.2 billion and took it private. The resignation of Christopher Davidge, Christie’s chief executive and an employee of 34 years, was announced on Christmas Eve.

At least nine antitrust suits seeking class-action status were filed against the auctioneers last week. The first alleged that, as early as 1992, the auction houses agreed to stop competing with one another on the basis of price. The suit alleged that the firms conspired to raise their commissions to the same levels.