While the deadline for the payment of returns nears, the art fund unit holders have received indications stating a new date of payment, according to one of the investors. It now appears that payments would be made somewhere in the month of December 2009. As per market sources, the delay in distribution of investor money is due to inability to sell the inventories of art that Osian holds.

However, officials from Osian deny there is any problem with the redemption. "The Art Fund will be redeemed on 9 November 2009 as per the redemption guidelines as shared with the unit holders in June 2009. The inventory has been sold and everything is progressing as per schedule," according to Neville Tuli, chief advisor— Osian Art Fund and founder of Osian.
 

Osian's list of inventories includes artworks by famous artists like M F Hussian, Bikash Bhattarchjee, V S Gaitonde, Akbar Padamsee, Jogen Chaudhary, Somnath Hore and Tyeb Mehta. All these artists were the top contributors to the total value of the inventory as of January 2009.
 

The thirty-six month close-ended scheme announced in July 2006 made a quiet exit with returns of 5% per annum. As of 9 July 2006, the total corpus held by the fund was Rs102.40 crore and it had 656 unit holders representing 39 cities in India.

 Will such poor returns deter Osian from launching art funds in the future? Not quite. "The next Art Fund will be launched once there are clear guidelines from SEBI on various key operational matters. It is now important that the system matures to a new level of financial due diligence and transparency but at the same time recognising the unique structure and logic of the art asset," says Tulli. But the fact remains that the Osian Art Fund has badly underperformed stocks, real estate and gold over the past three years.
- Debashis Basu and Amrita Pillay