Daniel Zhao of Hosane Auctions controversy.

Picked up on this from the new Pricepedia released today.

How Can This Be Allowed to Happen in our Industry ?

http://www.majesticrarities.com/pages/blog/bad-modern-chinese-coin-dealer/

 

Good to know that we cannot trust the prices realised on Hosane Auctions!!!. IMHO the best and most reliable price guide is actually looking at the completed ebay auction prices and using fishball's price stats. I have been suspicious about the high realised prices on Hosane for a long time. If China and HKG are paying such high prices, ebayers like logicpapa, Xu Hong ,naomi etc wouldn't have to flog their wares on ebay and pay 12%-15% in ebay / paypal fees.

 

I can tell you I met the owner of majestic rarities today and he was a true gentleman> I have a couple of pretty rare MCC that I brought to the show today to talk to the NGC folks about grading and my options .....after talking to me they sent me to majestic rarities who NGC told me was the guy talk to he took the time to examine the coins carefully for me (during a busy show) and give me his advise and his expert opinion on what he thought they would grade ,he never once tried to buy them ,just gave me his expert opinion like he was a friend, his inventory at the show was just unbelievable, i never saw so many kilo gold panda,s and mcc in one place most of his inventory is of the super rare variety ,but he was sure very kind to me................

 

Many thanks.

For very long while I have been thinking how a super common 1912 Szechuan dollar, hosane graded AU-UNC can sell for $2000 - $3000, when you can buy a PCGS AU58 for about $500-$600.

This is not isolated example. They were able to sell a ton of common coins at super high price, which is highly suspicious.

 

I remember last year a frosted 2000 S10Y in 67 grade sold for 700+ (or something similar) on Hosane.

Their prices have always been... interesting.

This confirms it though since the source is reputable.

 

Nick has always been a gentleman, and I've asked him for advise many times and he's always willing to help. Great guy.

 

http://forums.silverstackers.com/topic-27829-hosane-auction-results-bs-page-2.html

can we cross off clause c) of post 40 of the above thread?

 

"Why the high prices [at Hosane Auctions]?

a) Bribes and money laundering
b) Pump and dump
c) High quality coins combined with high demand."

1. Nope... just because Daniel Zhao is suspected of selling a stolen coin, does not indicate that Hosane Auction prices are not accurate.

I have bid and won on many items through Hosane's Auctions, and can attest that the items I have purchased have been at fair market value, and often higher.

Not just Pandas, but also some world coins. E.g this one:



2. In regards to this specific coin that is suspected as being "stolen".

It sold for LESS (approx. $290,000USD) than it's expected price of $400,000USD ... NOT more which many of these posts are suggesting.

Peter Anthony writes: "The buyer got quite a bargain", said noted collector Fan Huang. "Many potential buyers in China decided to boycott the sale, knowing that Hosane had bought the coin from an untitled seller then was selling it in their own auction. When the true owner discovered his missing coin in the Hosane catalog, he publicized the situation in China after Hosane's President Daniel Zhao both refused to withdraw it and cooperate in a generous proposal for its return." Mr. Huang believes that in less controversial circumstances, this rarity might have brought $400,000 or more.

3. Also in regards to the specific coin that is suspect as being "stolen"
Peter Anthony writes: "The legal title to a very rare China 1998 gold 5 ounce "Spring Festival" coin (reported as selling for over US$290,000 in the Hosane June 2012 auction in Shanghai) has been called into question."

This coin was purchased in Germany, but later sold in China. As to whether the seller in Germany is liable, or the seller in China (Daniel Zhao) is liable, in my opinion is the real question.

 

I'm not a lawyer, but here are the very simplified facts of the case that I've gleaned from PricePedia and from Majestic Rarities writeup:

1. A German coin dealer sold a very rare China 1998 gold 5 ounce "Spring Festival" coin to a US dealer.
2. That same German coin dealer lost the coin.
3. That same German coin dealer had an employee sell the China 1998 gold 5 ounce "Spring Festival" coin to Daniel Zhao - not knowing the coin had been sold to a US dealer and was missing.
4. Daniel Zhao purchased the coin (at a BARGAIN), and auctioned it off in China (for a BARGAIN).

("Apparently") Under Chinese Law, the German coin dealer is liable for selling Daniel Zhao a coin that had already been sold to a US dealer. Daniel Zhao is not required to act.
("Apparently") Under German/US Law, Daniel Zhao should return the coin since the legal title was already transferred to the US dealer. Daniel Zhao is required to act.

 

Morally wrong .
Leave a bad taste behind as well .

 

There is HONESTY, MORALITY and INTEGRITY besides BARGAIN in this business.

When you have a rare coin, do you want to offer to a dealer who will quote you less than 50% of the value in the name of BARGAIN, or you go to a dealer who will advice you the real market value and offer you a fair price.

Think!

 

Interesting that there is no information on how the German dealer and US dealer settled the first transaction.
I would think that if the coin didn't show up in the shipment his money would have been refunded negating the sale. ?

 

I commend all those in the Chinese numismatic community (and there are many) who tried to resolve this matter before it turned into a train wreck. As I understand it, many potential buyers held off from bidding on a coveted item. It's a very positive sign for the future growth of this field.

My hat is off to Nick Brown. Bravo!

Best wishes,
Peter Anthony
China Pricepedia
http://www.pandacollector.com

 

I don't know the answer to this, but with possible legal action in two countries on the horizon we may have to wait a while before all the details emerge. Nick's comments relate to our own choice of where to buy and sell. That is a personal, not a legal, decision.

Best wishes,
Peter Anthony
China Pricepedia
www.pandacolector.com

 

I'm not defending or accusing any of the involved parties (USA, Germany or China), but from my understanding, this is a fairly simple case.

1. The German dealer, and its employees are fully responsible for the sale of their coins.
2. The German dealer failed to make good on a sale to an American dealer. Therefore, it is the German dealer's liability and responsibility to refund/compensate the American dealer.
3. The German dealer then sold the coin to a Chinese dealer 1-2 years later. The Chinese dealer has no legal requirement to return the coin.

As Peter Anthony wrote: "...in China I am told that an innocent buyer cannot be made to give up his purchase. In general, the only recourse a wronged property owner has is to take legal action against the illegitimate seller."

E.g. Here is a totally fictional scenario.
1. If I sell JohnDoe a MS70 Panda coin for $1000, and fail to deliver, this is my problem. I need to compensate JohnDoe on his lost coin (perhaps a refund, alternative coin, etc).
2. If my employee (if I had one) then sells that same MS70 Panda coin, 1 to 2 years later, to MaryJane at half the price, this is my problem. (Perhaps I should fire my employee)
3. MaryJane has legally purchased the MS70 from me.
4. MaryJane is not in the wrong if she doesn't want to sell JohnDoe the coin. She has legitimately purchased the coin from me and has the freedom to do as she wishes.

 

Does not really that sound complex, and not "stolen" either

 

I have been told that there is an exception in Chinese law that relates to this situation. The legal aspect of this is not so simple. When I used the words "In general," I tried to imply that.

Incidentally, depending on where an event took place, did you know that American courts can, and do, defer to foreign law in deciding a case? I'm no lawyer (at all!), but I can see that as an international incident this will not be easy to untangle.

Best wishes,
Peter Anthony
China Pricepedia
http://www.pandacollector.com

 

This is not be correct as I understand the law. If the coin is "sold" to John Doe and ownership has been transferred, then the coin store can't convey ownership of the same coin a second time. The second buyer (Mary Jane) therefore never "owns" the coin, and the first buyer maintains the rights to it. Mary Jane may have thought she was buying the coin, she did pay money for it, but in fact she doesn't own it, and John Doe can have it confiscated from her. Not so fair to Mary Jane, but it highlights why gaining clear title to property, any property, is crucial.

Best wishes,
Peter Anthony
China Pricepedia
http://www.pandacollector.com

 

i know i should stay out of this but Yennus my brother the coin world operates on a high level of trust and honor, don't you and I send stuff to each other without even worrying about payment? If you where the German guy and I was Zhou ,i would return the coin ,and i know if the roles where reversed you would too........

 

jc888888888, my Panda brother - indeed, everything we do here assumes and expects a high level of trust and honor.

If I were Zhao, I hope I would have returned the coin, because a good name is better than gold or silver.

However, as the facts currently stand, I'm not going to be throwing mud at someone who potentially may be innocent. I don't know Nick and I don't know Zhao, but in the West there is a presumption of innocence before the pronouncement of guilt.

I've recently asked an American and Australian lawyer to comment on this case since it possibly affects us all. Hopefully I'll have permission to publish the response.

Consider this example:

1. A trusted coin dealer calls me, and then sells me a coin.
2. Then in 1-2 years time, someone claims to own my coin.
3. I would be pretty reluctant to hand it over considering I didn't do anything wrong.

In my humble non-legal opinion, the person that bears the liability is the coin dealer.