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
No, it was not the money that I valued —what I wanted was to make all this mob of Heintzes, hotel proprietors, and fine ladies of Baden talk about me, recount my story, wonder at me, extol my doings, and worship my winnings.”
–Fyodor Dostoevsky in The Gambler
Ready for the Gamble
Yet, when he broke into the art scene, Tuli was virtually unheard of. “There was a striking, slim, young man with a magnificent head of hair, and he kept putting up his paddle at the drop of a hat. He was surrounded by a bevy of young ladies egging him on. We wondered who this young man was. He was simply not known in Bombay,’’ says artist Jehangir Sabavala of Tuli’s early days.
When the Heart Stopped Beating
At a HEART auction in 1999, Tuli put up some old works of art with the assurance that two experts had certified their provenance or the history of their origin and ownership. It was later found that he had never even showed them the works. Given that certified provenance confirms the authenticity and legality of a work and can fetch higher prices, this controversy was a serious one. But Tuli terms the allegations “absolute nonsense and lies” insisting that it was HEART that introduced the concept of provenance in India.
The Cowboy Culture
Art funds look very much like mutual funds but differ in a key detail. Regulation. Stock market regulator SEBI had indeed brought out some recommendations to regulate art funds, but they were never finalised. Art fund managers were free to operate like cowboys.
Net Anxiety Value
That time came in the middle of 2009 when the fund closed, but Tuli failed to keep his promise. Used as they were to fancy NAVs, investors were just about digesting the fall in the market but at least expected to be paid what was due. But for five months, even that didn’t happen. Finally, Osian’s told investors that it would send out cheques in December second week. However, it managed to pay only a few investors, that too only 85 per cent of their principal. Tuli then told the two foreign banks that had referred the fund to their clients that he would not be able to meet the deadline. But he assured them that he would pay.
The Noose Tightens
The ambitious international venture not only sullied Osian’s books, it also landed Tuli in trouble with both Abraaj Capital and international auction house Christie’s. Tuli’s offshore company based in Jersey Isles was acting as the purchasing agent for IAAF and had accordingly signed an agreement with Abraaj in June 2008. The June agreement listed a total loan of about $23.7 million to Bregawn in the previous month. Abraaj has moved a London court to recover that money for which Neville Tuli has also given a personal guarantee.
(This story appears in the 05 February, 2010 issue of Forbes India. To visit our Archives, click here.)