Leaked documents detailing the vast art collection of Patrick Drahi, owner of Sotheby’s auction house, raise questions surrounding the French businessman’s tax affairs.
The hacked records, which allege Drahi attempted to avoid paying taxes on his $775 million art collection, were stolen by Hive, a ransomware group which the FBI and U.S. Department of Health and Human Services have previously issued warnings about regarding its hackings of business networks and healthcare services.
Drahi, who is the founder and owner of telecommunications company Altice, is worth $4 billion, according to Forbes. He purchased Sotheby’s in 2019 through his investment company BidFair USA, taking the auction house private after 31 years of operating as a public company.
In August, reports emerged that Hive had stolen data from Altice and subsequently posted documents on the dark web after an unfulfilled demand for ransom. Reflets, a French website which reported on these documents in a series of articles, was sued by Altice in September for violating business secrecy. While Reflets was banned from publishing more stories on the topic, the court ruled that its existing articles can remain online.
The cache of documents were additionally viewed by French publication Le Monde and Swiss outlet Heidi News, which conducted joint investigations on Drahi’s tax affairs. The billionaire supposedly owns more than 200 works with a value of at least 750 million euros ($775 million) through Before SA, one of Drahi’s holding companies based in Luxembourg, according to the outlets’ reports.
Hacked data reveals Drahi’s alleged attempts at tax-evasion
Some of Drahi’s works include Pablo Picasso’s 1955 Femme turc au costume dans un fauteuil, valued at 27 million euros (nearly $28 million) and Amedeo Modigliani’s 1918 Portrait of Jeanne Hebuterne Seated in an Armchair, valued at $71 million euros ($72 million). Drahi also owns Francis Bacon’s 1981 Triptych Inspired by the Oresteia of Aeschylus, which he purchased for $84.6 million in 2020 at a Sotheby’s auction.
While in the possession of his Luxembourg-based holding company, Drahi could avoid paying tax on capital gains for his artwork. However, he allegedly changed his approach after the EU in 2017 adopted new policies which addressed tax avoidance in nations like Luxembourg, according to emails, sales contracts and memos reviewed by Le Monde and Heidi News.
With the advice of tax consultants in Luxembourg and Switzerland, the Sotheby’s owner reportedly transferred his works to two shell companies registered in October 2021 in tax haven Saint Vincent and the Grenadines, a Caribbean nation. The companies, named Angelheart Ltd and Forever Ltd, were registered in the names of Drahi’s children and purchased his collection for $764 million euros ($791 million) through funding from Drahi. A second contract was later drafted to decrease this sale number by $17.7 million euros ($18.3 million), after Drahi’s tax experts suggested a decreased sale price in order to avoid paying capital gains tax.
“Mr. Drahi and his family have always paid all taxes due in respect of each related regulation,” said Arthur Dreyfuss, CEO of Altice France, in a statement to the Observer. “The documents that you reference are in the public because of criminal theft. We are working closely with the authorities on this matter.”
Drahi and tax consultant companies linked to the French businessman didn’t respond to requests for comment.