Around 85 Osian Art Fund investors still waiting for first payment  

December 28, 2009

 About 15 days back, Osian Art Fund sent a mail to its investors saying that it had started the process of redeeming their capital and all unit-holders would receive around 85% of their investment over the next 8-10 days. However, there are still around 85 investors who haven’t received a rupee from the Fund.

Sharat Jain, who invested Rs10 lakh in the Fund, is one among them. Mr Jain invested the amount in the name of Rachna Jain, but till date hasn’t received any amount from the Fund. He said,” We had sent an SMS also to the number provided in the email (which is the same number as provided by someone from the Fund’s Mumbai office). But no reply or message was sent back. We also sent an email to their office ID and also to Mr Neville Tuli, but there was no reply.”

When we checked with Mr Tuli, chairman, Osian’s-Connoisseurs of Art Pvt Ltd, he confirmed that there are still some investors (around 85) who have to be paid. “The process is ongoing in a systematic manner, and will be completed in the coming three to four days (outside of the holidays). Thereafter, all the investors will be paid the balance amount by 4 January 2010 as per my letter to unit-holders on 11 December 2009,” he said in an email sent to Moneylife.

As of July 2006, the total corpus held by the Fund was Rs102.40 crore and it had 656 unit-holders spread across 39 cities in India. On 9 November 2009, Moneylife was the first to report about the fact that Osian Art Fund reported poor returns, (http://www.moneylife.in/article/81/2392.html). On 15 November 2009, we reported on how the Fund was having trouble repaying investors’ money (http://www.moneylife.in/article/78/2332.html) and then we wrote on how SEBI has failed to regulate the Fund (http://www.moneylife.in/article/8/2824.html).

Responding to charges of not answering unit-holders’ calls or replying to their messages, Mr Tuli said, “There is absolutely no truth in our team not answering the client's concerns. I myself have spoken to virtually every unit-holder, and if a call remains unanswered—as it is my personal mobile number—I always return the call in the evening or the next morning.”

In a note sent to all investors on 11 December 2009, the Fund said that it has started the process of redeeming unit-holder capital and within the next 8 to 10 days, all unit-holders would receive 85% of their investment, in addition to their earlier 5% dividend.

However, there is some confusion between investors who have received some payment and the Fund. While the Fund claims that it started paying 85% of the unit-holder’s investment, in addition to their earlier 5% dividend, investors are clueless about the percentage they have received out of their total investment. Some investors are saying that they received around 75% amount that comprises their investment and net asset value (NAV) of the fund, assuming an NAV of Rs112. As of 9 June 2009, the Fund’s NAV was Rs120.27 (cum income distribution) and Rs115.27 (ex-income distribution).

In its earlier mail to Moneylife, the Fund said that it would pay around 90% of the invested amount in its first instalment. However, in its mail to investors, the Fund had said the payment would be 85% of the invested amount in addition to the earlier 5% dividend. So the discrepancies in the percentage of amount repaid continue.

For investors like Deepak Daftari who have been lucky to receive their first instalments early this month, the date for final payment is fast approaching. According to Mr Tuli’s mail, the Fund is supposed to pay balance amount to investors by 4 January 2010.

Lauding Moneylife’s efforts to protect the investor, Mr Tuli said, “The manner in which MoneyLife and yourself have tried to protect the investor's concerns is commendable, even though the Osian Art Fund is at the receiving end; this is the way a better system evolves.”

“It is important to make clear the difference between a 'delay' and a 'default' during the most difficult of times, let alone using other totally unjustified negative terms,” Mr Tuli added.

Whether the repayment issues of Osian Art Fund are ‘delays’ or ‘defaults’, we’ll let the investors decide.

— Amritha Pillay