Some of the artwork the Korea Deposit Insurance Corporation confiscated from suspended savings banks in Korea was auctioned in Hong Kong, but at nearly half the price the banks claimed to have paid for them.

Seoul Auction on Tuesday put 10 of the 91 works seized from Busan Savings Bank, Samhwa Mutual Savings Bank and Domin Mutual Savings & Finance, on the block at an auction held at the Grand Hyatt Hotel in Hong Kong. Nine items were sold, the total sales marking HK$18.32 million (2.64 billion won)

Most of the artworks were sold within or over the estimated price range. Chinese artist Zeng Fanzhi’s “Trauma,” which was appraised at between HK$5.7 million and HK$8.5 million, was sold to a French collector for HK$6.3 million. 

A piece from acclaimed Chinese artist Zhang Xiaogang’s “Bloodline Series” sold for HK$5.4 million to a Korean collector living in Hong Kong, and U.S. artist Julian Schnabel’s untitled work was sold for HK$1.25 million, which was almost double the expected price.

The auction results are creating a stir, however, because the final prices were significantly below what the savings banks claimed in their account books. The price of “Trauma,” for example, is reportedly listed by the banks as 1.3 billion won and the “Bloodline Series,” 1.4 billion won.

“We are cautious to say whether the prices listed in the account books were exorbitant, but we do see that whether the prices were appropriate should be examined. Although the art market is also a market with price fluctuations, the prices written in the book seem too expensive, even if they were bought when the market was good,” said Choi Yun-seok, head of the art auction team at Seoul Auction.

Insiders are raising suspicions that the savings banks may have inflated the prices to create slush funds. KDIC is reported to have started further investigation into the matter.

The Hong Kong auction was the second auction to sell KDIC’s confiscated artwork, following the March auction in Seoul in which four pieces were sold. The auction house will continue to sell off the rest of the confiscated works in Seoul in June and July, and in Hong Kong in the latter half of the year.

By Park Min-young (claire@heraldcorp.com)