Flamboyance and grandeur marked out Neville Tuli as India's best-known art messiah. Today the collapse of his fund has revealed he got it all wrong
Neville Tuli became the best-known spokesman of the country’s art and launched the world’s largest art fund. Then he fell from glory with the plunge in the art market, struggled to pay his investors and stared at the risk of losing all that he created.
Tuli needed about Rs. 115 crore to repay investors in Osian’s Art Fund – Scheme Contemporary 1, when the three-year scheme matured in July 2009. Unfortunately, a global recession froze the art market, landing Osian’s Connoisseurs of Art (Osian’s) in a liquidity crisis and left the close-ended art fund marooned with unsold inventory.
Tuli had told Forbes India on January 16 that the art holdings of the fund have now been sold and the firm is awaiting payment from buyers.
As things stand, the financial picture looks bleak. Estimates based on due diligence done by KPMG for Dubai-based Abraaj Capital, an investor of Osian’s, reported Osian’s debt as Rs. 133 crore for the year ended March 2009.
Tuli founded Osian’s in 2000, which runs a self-supported auction house. By 2005-2006, Tuli’s company had reported revenues of Rs. 65 crore and a healthy profit of over Rs. 11 crore. In June 2006, he announced the launch of an art fund amid an economic boom. A clutch of banks led by BNP Paribas and ABN Amro referred their wealthy clients to buy units in Osian’s Art Fund.
Initially, Osian’s art fund appeared to be a thumping success. Investors were, however, blind to one small detail: Neville Tuli practically decided the value of the stock as he had hand-picked every piece of work.
(This story appears in the 04 June, 2010 issue of Forbes India. To visit our Archives, click here.)