Osian Art Fund’s chief advisor rubbishes talk that phone calls are not answered. Minerva theatre plot deal yet to materialise

Moneylife Digital Team

Osian Art Fund’s chief advisor Neville Tuli had promised some time ago that he would pay back all his investors by 29th May 2011. However, on account of a prolonged silence on the part of Mr Tuli, speculation was rife among creditors that he had probably left town. Now, it seems that the art fund advisor is in Mumbai, and he says that the process of paying back the money has begun.

Mr Tuli also dismissed talk that calls or emails from his creditors remained unanswered. “There is not one unit holder who has not been personally replied to by my office. Naturally, it is not possible for me to personally answer every call when i am in meetings or out of the office,” he said.

However, many investors allege that they received no response to their calls. With the date for payment approaching and no communication from Mr Tuli, there were rumours that he was being evasive about the payments and that he might have left the city. And the defunct state of Osian’s website (www.osians.com) increased the speculation.

What made matters worse was Osian’s silence on the Minerva property sale. Mr Tuli now says that the deal is yet to materialise. “It (Minerva plot) is still owned and in the possession of Osian’s Connoisseurs of Art Pvt Ltd,” Mr Tuli said.

Osian Art Fund had promised to pay back investors after they threatened legal action. It said that payments would be made as soon as the sale of the Minerva theatre plot in Mumbai was complete. When investors’ calls remained unanswered, rumours began to circulate that the Minerva plot had been sold and that the new owner of the property was in the market to raise money for a redevelopment project.

A retired journalist expects to receive Rs3 million in his capacity as a vendor. He believes it is possible that Mr Tuli is on leave, because he has not received any reply to his emails for almost six months. He is equally pessimistic about the Minerva plot sale. “We also heard rumours that the Minerva property had been sold by him, but he (Mr Tuli) is remains tight-lipped for fear that his creditors will pounce on him—which is happening anyway,” the vendor alleged.

“Unlike investors, vendors do not expect they will not be paid because of a meltdown or whatever. A vendor is selling hard goods and should get his money once the stuff is sold and get back the unsold lot. I gave my books to him to sell and got cheated. In law, the payments proceed first to the employees, then to vendors and then to investors,” the vendor said.

Mr Tuli is yet to pay Rs1.3 million out of some Rs4.6 million due against the sale of an art books library in a New Delhi auction held in July 2008. He hasn’t compensated the vendor for a few precious books that never appeared for auction, despite a written receipt, and neither returned the unsold lot or the film posters that he bought from the vendor’s wife. Add to this the interest accumulated on the total amount.

It’s a similar story in the case of a CEO of a mutual fund company, who has been left in the lurch. In his email to Mr Tuli, he remarked, “I have left at least five messages in the last one year at your office. Your mobile phone which was on a year back, is now switched off or unanswered. Needless to say, at least you had the courtesy to return my calls earlier, which has stopped in the last one year and I am disappointed with the whole affair.”
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The last that anyone heard from Mr Tuli was when he replied to Moneylife’s emails and promised unit holders ‘full redemption’ will be done by end of June 2011 (Read, Osian’s new promise: Will pay back by 29th May.)

Investors, on the other hand, are furious by Mr Tuli’s silence and the confusing bits of information circulating about. “I am a lucky person to get 85% of my money back. When I called up the office, I was told that first all investors will be uniformly paid back 85% of their money, and only after that could we expect the balance payments,” remarked Delhi-based investor Sharat Jain.

The communication gap appears to have aggravated the pessimism among Osian’s creditors. It would be in the fund’s own interest to answer investors’ calls.