Swiss watchmaker Omega says that three former employees were involved in a criminal plot that resulted in the sale of a fake Speedmaster at auction for more than $3 million.
The timepiece, an Omega Speedmaster with broad arrow hands, from 1957, was in fact a “Frankenstein” watch, composed of an amalgam of mostly authentic parts from other vintage watches, the Biel, Switzerland-based company said in a statement in response to questions from Bloomberg.
The timepiece sold for more than 3.1 million Swiss francs ($3.3m) through auctioneer Phillips in November 2021, the highest price yet paid for a Speedmaster at auction.
The watch was bought by Omega itself, the company said.
The scandal underscores concerns that forgers are creating counterfeits or altering some vintage watches sold on the secondary market and at auction to achieve higher sale prices.
Collectors will pay millions for certain watches in good condition with original parts.
A former employee of the Omega Museum and its brand heritage department was among the staffers alleged to have participated, Omega said.
That person “worked in tandem with intermediaries to purchase the watch for the Omega Museum”, informing company executives that it “was a rare and exceptional timepiece that would be an absolute must” for Omega’s collection, the company said.
But the watch was a sophisticated forgery, mixing components from various timepieces as well as potentially fabricated parts, Omega alleges, adding that the former employees may have been involved in its assembly.
Omega did not identify the former staffers it claims participated in the scheme.
“Its false legacy allowed the profiteers to justify a highly inflated bid made through the intermediaries,” the watchmaker said.
The scheme was “to the massive detriment of Omega”, chief executive Raynald Aeschlimann told Swiss newspaper NZZ, which first reported on the case and the accusations against the former employees.
Its false legacy allowed the profiteers to justify a highly inflated bid made through the intermediaries
Omega
An Omega spokesperson said the company does not yet know who brought the watch to Phillips to sell at auction.
A representative for the auction house said it has not disclosed the identity of the seller because of client confidentiality rules but would do so if asked by authorities such as the police or courts.
When Phillips consigned the watch and went to Omega for information from its archives, “we were not aware of the alleged criminal activity that is now the subject of an investigation”, the representative said.
The auction house obtained confirmation from Omega of the date of manufacture of the numbered movement, its serial number, the model of the watch that the movement was fitted to and the date it was sold, its representative said, adding that Phillips understands that representatives of Omega saw the watch before they bought it.
Phillips said it is committed to the “highest standards and due diligence levels in the watch market” and that the item in question had been viewed by collectors, scholars and experts and travelled to London, Singapore, Hong Kong and New York before it was auctioned in Geneva.
“If, having reviewed the evidence, we think there are grounds for criminal prosecution, then we will have no hesitation in referring the matter to the authorities to prosecute,” the Phillips representative said.
Best known for its Speedmaster and Seamaster models, Omega is the third-largest Swiss watchmaker by revenue with sales of about 2.47 billion francs in 2022, according to Morgan Stanley estimates.
The brand is part of Swatch Group and generates about half of the company’s overall watch sales, Morgan Stanley said.
Match info
Wolves 0
Arsenal 2 (Saka 43', Lacazette 85')
Man of the match: Shkodran Mustafi (Arsenal)
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
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FINAL RESULT
Sharjah Wanderers 20 Dubai Tigers 25 (After extra-time)
Wanderers
Tries: Gormley, Penalty
cons: Flaherty
Pens: Flaherty 2
Tigers
Tries: O’Donnell, Gibbons, Kelly
Cons: Caldwell 2
Pens: Caldwell, Cross
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
