Osian’s new promise: Will pay back by 29th May

Neville Tuli's latest promise to pay back money raised for Osian's Art Fund comes after the threat of collective action by some aggrieved investors

The threat of investor action has forced Neville Tuli, Chief Advisor, Osian Art Fund, to issue yet another promise to pay back those who invested in the controversial but high-profile art fund in 2006. This time, Mr Tuli says, those investors who haven't got any of their money back will be paid between 17th May to 29th May. Mr Tuli, who was apparently refusing to respond to investor queries, turned proactive after Moneylife took up the story of dozens of investors threatening to get together to file police complaints and lawsuits.

To recap, Osian Art Fund is a three-year close-ended fund launched in June 2006. It raised Rs102.40 crore from 656 unit-holders across 39 cities, most of them high net-worth individuals (HNIs). The scheme used to declare Net Asset Values (NAVs) showing 30% returns, but when it was time for redemption, the money wasn't forthcoming. The Securities & Exchange Board of India (SEBI) had also issued it a show-cause notice in November 2007 asking why it should not be regulated as a collective investment scheme; it also issued an advisory that civil and criminal proceedings can be started against art funds that were not registered with SEBI. The scheme was wound up on 10 July 2009, at which time Mr Tuli wrote to investors that redemptions would be made over the next 120 days as per the terms of the redemption guidelines. But by October, when the money wasn't forthcoming, Moneylife was the first to report on Osian's problems (Read Osian Art Fund delays payout).

Following our reports, many investors were paid anywhere between 40% to 100% of their principal but earned no returns at all. The rest have been kept hanging for two years with promises of payment. At one stage, investors were told that they would receive their money after an art auction in June 2010 to raise cash; again, no payments were made.

Finally, on 25th April, some angry investor got hold of a long list of aggrieved unit holders to get support for joint action. Immediately, some were offered artwork instead of cash. Some investors claimed that they had been 'forced' to accept artworks at extremely high valuations in lieu of their payment.

When Moneylife emailed Mr Tuli for this reaction, he reacted with anger and accused us of publishing distorted emails. In a subtle threat, he even began marking his legal firm Nishit Desai & Associates on his flurry of emails to us. At one stage, despite a clear SEBI advisory in February 2008, Mr Tuli even claimed that art funds are not declared as collective investment schemes by SEBI, they merely suggested that the collective investment scheme could be a possible option and/or a base to study a regulatory framework for art funds in the future. Our question in all the emails was simple. Was Mr Tuli planning to pay back investors who have not received any returns and anywhere between 60% to 100% of their principal, even two years after the Osian fund was wound up?

By the evening of 27th April, Mr Tuli told us that a statement would go out to all unit-holders about repayments. He even called some investors requesting them to hold off action. Finally, late in the evening, Mr Tuli wrote the following letter to unit-holders:

Dear Unit Holder,

The recent wave of emails by a few of you is understandable given the delays in the art fund's redemption. However, as always stated the Fund is totally committed to paying all our Unit Holders in full, and it continues to do so despite immense liquidity problems.

The instalment for those still awaiting their first payment will begin by Thursday, 17 May 2011 and will be completed by 29 May 2011 as mentioned earlier to the bankers. The offer for those who have chosen to take art in lieu of their redemption will be closed by Monday 7 May 2011 but can be renewed at any time for any individual Unit Holder who wishes to avail of such an offer.

I know at times our communication process has been slow, but please recognize that the bankers were initially dealing with all the Unit Holders, and now that this responsibility is mostly upon us, naturally it takes time given the small team available to the Osian's Art Fund. This is no excuse but coordinating on individual matters and mails with 656 investors has been very difficult. Maybe this coming together of a few investors will improve the communication.

Further, please desist from rash, defamatory and baseless allegations, without verifying the facts. I am always available to answer your queries and difficulties via email or SMS or direct lines. I am not going anywhere despite the wonderful suggestions by a few unit holders.

Once and for all, every thing in our power is being done so as to complete the redemption process, and I am sure despite the past delays, irrespective of the problems we are facing the full redemption process will be completed by the end of June 2011. You all have been very patient and graceful, and I am grateful for this courtesy, and do regret disappointing your expectations, but the key is that we do not give up on honouring our commitments whatever the personal cost and effort.

With Warm Regards

Neville Tuli

Chief Advisor Osian's Art Fund 

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Comments
Sharat Jain
8 years ago
We have not received the redemption proceeds from Osian's Art Fund. We have written on many forums, but till date no action has been taken against this scheme. It is very hard to digest that this type of schemens are first floated under the nose of our Govt., and then when the company is unable to pay back (for the reasons best known to them), they try to delay the matter for years & years on one pretext or the other. Sharat Jain. New Delhi.
Prakash
1 decade ago
I too have been paid just 85% of the total amount invested and have been promised by Neville time and again that he will pay after the auction, or after sale of Minerva, etc. etc. Everytime there is a new excuse and the bottomline is extension or delay of payment, till you loose your steam.

I too wish to join the group. I am in Mumbai and I can be contacted on [email protected] (it is two zeros after fmt). I request the group to contact me or leave their contact details here so I can contact them. But it is high time that Neville is shown the result of cheating and fraud. He should not get away with our hard earned money.
Mitul Desai
1 decade ago
I appreciate Moneylife for taking up this issue but you should also take up issue of JM Mutual fund's close ended scheme where after 3 years investor were returned just 30% of investment amount.
manoja
1 decade ago
@Seema, why do you presume I am working for Osian? If you have been following my other postings in this site, you will know that I belong to the much maligned community of financial product distributors!! An insurance agent and a mutual fund distributor.

But the question remains. This was an investment which people did with an eye of getting returns. No guarantee was ever given, either for the returns or for the safety of the capital. So why cry hoarse now?

desh vasi
1 decade ago
Relax Relax

Karma will hunt all down

Everyone knows where Tuli lives

If Sharad Pawar can be cornered.. than what is neville tuli.

tuli and his ugly girlfriend will have to pay..
Sharat Jain
1 decade ago
Earlier the reason for delay in payment was attributed to delay in sale of Osians property named Minerva Theatre & that as soon as the same be sold, the entire due money would be refunded to investors immediately. Now, today, my sources have informed that Osians has sold that the prime property in Mumbai-Minerva & buyer is in process of doing some construction over there. Now, if this news is correct..... then where the hell has entire sale proceeds gone...????? We are still to receive our balance amount back.... and I am sure a lot of other investors are in same boat....... waiting endlessly !!!!!!
Sharat Jain
1 decade ago
Mr. Tuli is a real smat person & knows his job of dilly delaying the things for years by makinh false & sweet promises. I invested 10 lacs & have been paid only 85%. I am real thankful to the goup of people who have started this movement collectively. I want to be a part of this group as I am also one of you being cheated by Osians. Mr. Tuli must be under the impression that since this class of investors are educated, they would not go for demonstrations & dharnas... But thankfully now collectively with the help of Moneylife, we can try & extract our principal back Do make me a part of this movement. My email ID is [email protected] & contact no. is 9811019280 (Delhi).
Prakash
Replied to Sharat Jain comment 1 decade ago
I too have been paid just 85% of the total amount invested and have been promised by Neville time and again that he will pay after the auction, or after sale of Minerva, etc. etc. Everytime there is a new excuse and the bottomline is extension or delay of payment, till you loose your steam.

I too wish to join the group. I am in Mumbai and I can be contacted on [email protected] (it is two zeros after fmt). I request the group to contact me or leave their contact details here so I can contact them. But it is high time that Neville is shown the result of cheating and fraud. He should not get away with our hard earned money.
Manoja
1 decade ago
I dont understand why the investors in this fund are crying hoarse now!! If at all, they should have excercised their due diligence BEFORE putting the money in a scheme like this. Not AFTER.

There are a few things which are uncertain after reading the few articles Moneylife has posted.

Was there any guarantee that capital would be protected no matter what?

Was there any guarantee of meeting certain percentages of returns, no matter what?

Did the fund house hold a gun at the investors forcing them to invest?

If the answer is affirmative to the above, I agree Osian has blundered. If it is not, then where and what is the problem?

This was another asset class which the "shrewd" thought they will derive great benefits from. Also compared to the plain vanilla insurance/mutual funds/equities route, don't you think it would have appeared glamourous to say in cocktail parties that "I have invested in Art"???



shailesh
Replied to Manoja comment 1 decade ago
due diligence can only work upto a limit. eventually if an individual does want to defraud someone , he will find ways. and tulli simply doesnt want to pay as he dosnt feel there is a need to. what due diligence can change his mind. what you are saying is actually this ' i managed to cheat the system and launch a fund, didnt guarentee that i will ever return your money even if i had the same and the law doesnt require me to return the money i take from people , so who cares'. i dont think mr tuli understands that there are winds of change. the corrupt are having a tough time these days.
longarmsoflaw
Replied to Manoja comment 1 decade ago
better late than never . we have done our due diligence now and know that tulli misrepresented info. his fund was illegal and he will soon be behind bars. its a financial fraud and he is digging his own grave. the investors in this fund are capable enough of defending their rights. we will see who has the last laugh. sure life is a learning process and i humbly accept that i will be the one selling art to mr tuli next time!
seema
Replied to Manoja comment 1 decade ago
How nice! are you working for Osian. So just because there were no overt promises they can stock up on expensive artwork and walk away, is it?
Sure, investors ought to have been careful. But this is a fund, where Moneylife says even CEOs of top brokerage firms and CEOs of mutual funds applied.
Maybe their failure to give returns can be justified, but it is ridiculous to blame investors who want their principal back -- especially when Osian is not bankrupt and is hanging on to art works.
citizenindia
1 decade ago
the man is a crook. white collared fraudster. took money from unsuspecting investors by showing fancy trustee names and promise of returns from a new asset class. today they all hide behind technicalities and well paid lawyers. the high profile agents who had pushed osians products too are nowhere to be seen. i too got stuck with investments in osians. actually my fund manager who had earned me a decent sum in equities wanted me to shift a part of the money we earned to a new asset class. i was dead against it but since he had done well , i gave him leeway for minimum ticker as it was out of profits we earned. its a lesson on how not to succumb to pressure. no name will come to your rescue as eventually they are all driven by the greed for money. and this fellow is rubbing salt on wounds of his investors. he first paid a few of them arbitrarily to silence the few who were agressively going after him. for the rest he kept on buying time, came up with another idea of offering paintings. this guy has shown what a classic fraudster is like. i dont think moneylife or anyone can get him to pay up as he has come to believe that he has done no wrong. read his letter and youd know that he is an arrogant defaulter . and he knows that it will take years for law to catch up with him. by then he would have enjoyed our money. the punishment for financial frauds aint much anyways. unless people at moneylife pursue this case , nothing will come out. the only thing they are scared of is media as he still hosts art auctions and still nurtures ambitions of raising money again!
Kokila A Rawal
1 decade ago
I am very glad that you have taken up the issue by stating all the facts. But how to trust Osian in spite of their several promises. I am also unit holder of Osian Atr Fund. I tried to call them in the past no proper answer were given. And they even shifted their office to New Delhi. I was not getting any information against my E mail.
Please advise what I should do to get my investment back. As few invested has already got part of their investment.
Now what is about the interest ? of all this year. they must give interest with principal. Thanks
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