The charity auction for flood victims in central Vietnam which was said to be the most successful with up to VND73.9 billion dong ($3.3 million) has become a scandal after the auction winners turned out to be fakes. The case further attracted public attention when more details were discovered.

Besides the question about legal aspects of the auction and how to punish fake auction winners, the public also questioned that who would have really benefited from the auction, flood victims or someone else, if the auction was successful.

Before the charity auction took place on November 11 in HCM City, the information on the starting prices of items for auction made many people astonished.

The starting price for a bronze drum which was cast to celebrate Hanoi’s 1000th anniversary was fixed at VND6 billion ($300,000). It was VND4 billion ($200,000) for a 10kg raw ruby, VND90 million ($4500) for a gemstone-made painting with the signatures of Miss Earth 2010 contestant and up to VND40 billion dong ($2 million) for a set of four fossil wood artworks featuring four spiritual creatures (dragon, unicorn, turtle and phoenix).

How the prices for these items were set?

Vo Ngoc Ha, the owner of the four fossil wood artworks said: “My items are unique artworks so they are invaluable. Nobody can assess them. However, I fixed them $1 million because at the exhibition in October, one offered that price but I didn’t sell them”.

These artworks are called go lua artworks, which are fossil wood items and they are natural artworks, which were not made by man.

An expert from the Hanoi Valuation and Financial Service JS Company said that before the auction, he received a picture of these items from a client who asked him to assess the value of these artworks.

He said that he couldn’t appraise them because he didn’t have any information about input or any similar products to make comparison.

The scandal related to the charity auction has spread quickly on the Internet. Many people said that it was a butt. Some said that this was a trick to sell products at high prices. They said if these items are sold in the market, nobody can afford to buy them.

“Through charity auctions, someone can sell products that are unsalable or sell normal products at very high prices or to dodge taxes. The auction on November 11 may be an example,” one wrote on an online forum.

The original prices of these items are a great concern because people want to know about the differential money between the original prices and the winning prices at the auction and who earned the differential money. They also wondered why the starting prices of these items were so high and what was the foundation for fixing the prices.

Specifically, the starting price for the bronze drum was VND6 billion ($300,000) and the winning price in auction was VND12 billion ($600,000). The 10kg raw ruby had starting price at VND4 billion ($200,000) and the winning price VND11 billion ($550,000). The starting and winning prices of the gemstone painting were VND90 million ($4500) and VND3 billion ($150,000) and $2 million and over $2.3 million for the fossil wood artworks.

If the auction was successfully and the auction winners paid for the items, the total earnings from these items would have been VND73.9 billion (over $3.6 million). However, flood victims would have received only VND23 billion ($1.1 million) because the owners of these items would receive the money equivalent to the starting prices (VND50.9 billion).

Nguyen Trung Thanh, Chairman of ASEAN C&C, who bought the four fossil wood artworks at the price of $1 million from Vo Ngoc Ha in Lam Dong and then set the starting price at $2 million, said that his company auctioned these items for charity and for advertising the firm name, not to do business. However, it is questioned that what would the firm do with the $1 million of profit from the auction?

Thanh explained that his firm set the starting price at $2 million, doubling the price that it paid for Vo Ngoc Ha, because many businessmen took part in the auction and “We wanted to collect more money for flood victims”.

However, Thanh couldn’t explain how the excessive $1 million would go to flood victims. He said his company invested around VND1 billion in the auction but the investment was just 1/20 of the profit from the auction.

According to Tien Phong Newspaper, the first owner of the fossil wood artworks, Vo Ngoc Ha from Lam Dong province, bought these items from some wood processing firms at the price of only VND20 million ($1000) and he sold them to ASEAN C&C at the price of $1 million.

Vo Ngoc Ha said the rumor was wrong and he would ask relevant bodies to investigate the origin and legality of his items. “I had never planed to sell these items because they were my treasures for many years”.

Ha said after these items were displayed at the exhibition of special items to celebrate Hanoi’s 1000th anniversary in Hanoi in October and became very famous, ASEAN C&C proposed to buy them at the price of $1 million for a charity auction.

“They were very enthusiastic and they said they buy these items for charity purpose so I agreed. I didn’t think that this was a fraud until I discovered that they pushed the price to $2 million,” Ha told Tien Phong.

He said these items are invaluable because they are unique artworks. He also said that the items were granted a certificate for unique artworks by the Vietnam Center for Ornamental Stone, Fossil Wood Artworks and Folk Paintings – Statues so they must be valuable.

Huynh Minh Xuyen, Chair of Lam Dong province’s Ornamental Trees and Animals Association, said that so far the highest prices for fossil wood artworks have reached only several hundreds of million dong (tens of thousands of US dollars). The value of Ha’s items can’t be millions of US dollars.

At the same time, lawyers said that it is very difficult to take legal proceeding against people who won the auction and refused to pay money for the auction items because the auction organizing board didn’t announce the auction rules and sign contracts with people who joined the auction.

The scandal in brief

In a charity auction for flood victims in central Vietnam in HCM City on November 11, which had the participation of the Miss Earth 2010 pageants and many businessmen, four items were auctioned, including a bronze drum, a 10kg raw ruby, a gemstone painting and the set of four fossil wood artworks featuring four spiritual creatures (dragon, unicorn, turtle and phoenix). All of the items were auctioned at very high prices.

However, it turned out that the three auction winners for the bronze drum, the ruby and the gemstone paintings were faked (These people joined the auction though). The Bao Long Ceramics Company, which won the auction for the four fossil wood artworks at VND47.9 billion (over $2.3 million) refused to pay for the items. This firm also didn’t fulfill its commitment to donate VND1 billion to flood victims.

At the same time, it was rumored that the original prices of the four fossil wood artworks are only VND20 million ($1000) while they were auctioned at over $2.3 million.

PV