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Khushboo Narayan – THE MINT

Mumbai: An investigation into the business practices of Osian’s and Saffronart Management Corp., two of India’s premier art houses, has revealed several irregularities in their account books, including a possible attempt to rig the price of artworks and dupe investors, according to an income-tax (I-T) department official involved in the probe.The two houses—both set up in 2000—separately denied any wrongdoing, claiming all their transactions were transparent, well documented and in line with the law.Busted? Osian’s chairman Neville Tuli with a statue of Sean Connery. Tuli has denied allegations of any wrongdoing at the art house. Natasha Hemrajani / HTThe I-T department’s “appraisal report”, previewed by Mint, reveals that Osian’s had obtained fake purchase bills worth Rs15 crore for artworks. The department, which started a probe into alleged tax evasion in 2007, questioned three persons who provided Osian’s with such bills and admitted they were fake, the official said.“Fake purchase bills can be used to inflate the price of art by lesser known artists. This is the easiest form of manipulation of prices in the art world. The technique is similar to that used in the stock market to rig the share prices of any company,” said the official, who didn’t want to be named. Art houses can use these fictitious purchase bills to set an inflated benchmark price for works by artists, causing genuine investors to pay more, according to the official. “Some of the art galleries have inflated the price of certain artists up to as much as 700%,” the official said. The assessment wing of the I-T department in Mumbai is evaluating the extent of suspected tax evasion by the two houses.On Saffronart, the report said the art house had paid royalty to an associate firm, Planet Saffronart Management Corp., in the British Virgin Islands, to reduce its tax liability. The report also said Planet Saffronart had given Rs11 crore to Saffronart for acquiring its intellectual property rights. Also See Under Suspicion The department investigated such transactions and found them not in line with the law, said the official. “We have also found a lot of cash transactions in Saffronart,” he said.The report also said at least 18 investors, who had invested Rs10 lakh and above each in Osian’s Art Fund, could not explain the source of the money they had put in the fund.An art fund is like a mutual fund where investors do not pick the individual investment vehicles and instead invest in a pool of artworks. Typically, high net worth individuals invest in such funds. The minimum investment in some funds is pegged at Rs25 lakh.The I-T department has alleged that Osian’s was involved in synchronized trading and rigging of prices of art.
In an emailed response to Mint queries, Neville Tuli, Osian’s chairman, said: “The allegations are false and defamatory. The so-called Rs15 crore fake purchases are absolutely incorrect. These transactions were made to Gallery 7, a 20-year-old gallery, and (an) associate art dealer called Rashesh Shah, for purchase of artworks by artists such as J. Swaminathan, S.H. Raza, Ramkumar, A. Padamsee, V.S. Gaitonde, Jogen Chowdhury, Atul Dodiya, among others.“Like with many galleries and dealers, they told us that they would like to directly invoice Osian’s from their client’s company, as they do not own the artwork. We were told that the client will pay them their commission. All transactions were fully paid in cheque and all artworks physically handed over to Osian’s.”According to Tuli, the I-T department two years later told Osian’s that these clients of Gallery 7 and Shah were not genuine art collectors but benami parties. “We have never dealt with Gallery 7 and Shah thereafter.” A benami transaction includes any deal in which an asset is transferred to one person for a consideration paid or provided by another person.“Gallery 7 has no correlation with any claims made by Osian’s. We clearly state that there has been no involvement of Gallery 7 in any kind of transaction with Osian’s in the past few years. The claims are totally absurd and preposterous,” said Nicholas Sachdev, partner, Gallery 7.Sachdev said Shah was an independent art dealer and not a part of Gallery 7. “Being an art gallery we refer a lot of clients to auction houses but we have not done transactions on behalf of any client or received commissions,” Sachdev said.Mint could not ascertain the whereabouts of Shah.Tuli also said, “There is no question at all of Osian’s creating bogus turnover or synchronized trading to rig up prices. It is totally against our ethos and the very reason why we exist. Naturally, there are many people who bought art for investment and hence reselling is part of the process. That is absolutely normal.”On investments in the Osian’s Art Fund, Tuli said, “Every investor filled up a detailed form with PAN (permanent account number) and bank account details, bank references and all legal requirements. Every document was given to the authorities; every payment was in full cheque. Your claim is absolutely not true.”According to him, the success of the Osian’s Art Fund had upset many. “Many fear that art funds will soon become public platforms, and so help further destroy the black economy. At the same time, the levels of disclosure set by the Osian’s Art Fund make us easy targets,” he said.In an emailed response to Mint’s queries, a Saffronart spokesperson said, “Saffronart has been pivotal in introducing complete transparency in the market for Indian contemporary art by publishing transaction details and prices clearly on our website. We are a professional company and all our transactions are clearly documented and are in compliance with applicable laws.”According to Ranjit Hoskote, a Mumbai-based art critic, there is no such thing as an authentic price for a work of art. “There is only a current price widely agreed upon by all market actors and proportional to the available capital and purchasing power within a specific context—and you can take it or leave it. That is the nature of any market,” Hoskote said.
“The question of a conflict of interest can hardly arise, because the interests of artists, auction houses and galleries are closely aligned. And do remember that no collector or investor has ever been coerced into buying a work of art—you always have the option of not buying in a private sale, of not bidding in an auction. If people have been prepared to buy works of art at prices that are obviously steeper than they should have been, this is a comment on their own desire to profit from a boom-time scenario…to participate in the creation of a new market,” he said in an email.In a nascent art market such as India, according to him, systems of mutual regulation and transparent valuation are yet to be codified but are bound to come within the next decade. Art galleries and experts believe the market is slowing due to the downturn. “The galleries are bemoaning the fewer footfalls, and young investors who used to buy with their bonuses are no longer buying as easily,” said Saryu Doshi, former director of the National Gallery of Modern Art, Mumbai.Maitreyee Handique contributed to this story.

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New Delhi, Feb 24 : Noted auctioneer Osian’s has clocked Rs 3.38 crore in sales at its second auction this year with contemporary artist Atul Dodiya’s work dedicated to former Team India captain Rahul Dravid fetching the highest bid of Rs 57.6 lakhs.

A total of 25 out of 50 selected lots that went under the hammer were sold with a registered average lot price at Rs 13.5 lakhs at the auction held here on February 21. Osian’s first auction was the ABC series last month in Jaipur.

While Dodiya’s “Wall” fetched over Rs 57 lakhs, modern masters such as F N Souza, V S Gaitonde and Bikash Bhattacharjee also figured among the top five sellers in results released by the auction house Another highlight of the auction was K K Hebbar’s portrait of Indira Gandhi fetching Rs 19.2 lakh.

“Figure,” a brass sculpture by Meera Mukherjee fetched Rs 34.8 lakhs, while works by leading artists Chittaprosad, Manu Parekh, Sajal Roy, Amalnath Chakladar were also sold.

Both Mukherjee and Himmat Shah’s “Untitled” works were auctioned at prices above lower estimates, which the auction house said proved that “art of the highest historical significance holds its value far better than most other financial assets. ” Nevile Tuli, Founder-Chairman, said, “The art market is suffering like all other assets. This is thus the time to build when everyone has gone into hibernation.”

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At the upcoming Osian’s auction many rare Indian works on modern masters such as Raja Ravi Varma, Ravindranath, Amrita Sher-Gil, Ismat Chughtai, George Keyt, MF Husain and FN Souza among others will go under the hammer on July 15 at New Delhi. The entire collection which will include art works and film posters along with these rare books are worth Rs 24 crore.

Investing in books is a trend that is fast attracting people in the country. Brij Sharma, Head of antiquarian books and prints, Osian’s says, “Books can be a good investment today. In the Indian context it has always been true of illustrated books published in the last 200 years.” Sharma is of the opinion that the conventional sources of acquiring these books like booksellers who have very old collections, are just a handful across India. And with personal libraries drying up, there is every likelihood of their value will rise at a fast pace given the ever-increasing number of collectors. Sharma sites two examples; “I have seen Daniells’ Views of Calcutta, a set that has appreciated 12 times in ten years between two London auction houses and Osian’s itself has seen books on, Sher-Gil and Tagore appreciate by three to four times in five years or so.”

“There are many book collectors in India. I recently bought a three hundred years old, pocket book of Christian prayers from Germany. I bought it because I am interested in collecting rare books,” says Kalpana Shah, owner of Tao Art gallery. She adds, “The interest then leads to investment but the collectors of books are primarily passionate about collecting rare stuff and money follows naturally.”

Pervez Damania says, “In the west, there is a huge demand for collecting first edition books. I would like to lay my hands on rare Indian books. If I get to but the first copy of Rudyard Kipling’s Jungle Book I would be thrilled.”

But the million dollar question is that what kind of books are worth having in the collection. Maithili Parekh from Sothbey’s says, “First editions of popular books, handwritten essays, limited editions are just some.”

Sharma from Osian’s adds, “There are two streams of books favoured by Indian collectors: on Indian art and on British India. Many of the books were published in limited editions; most of them heavily illustrated with tipped-in colour plates on account of technological limitations which today add to their value.”

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KOLKATA: Leading auctioneer Osian’s is coming up with the fifth edition of its ABC (Art, Books and Cinema) series sale soon. The auction sports a total estimated value of Rs 24-25 crore, comprising 201 lots. Of these, 132 are paintings, 20 are books, while the rest embraces movie memorabilia.

The 132 lots of paintings encompass 25 contemporary works and the rest are modernist, post-war modernist and Bengal School. A Ram Kumar figurative from 1967 is estimated at Rs 2-2.5 crore, while a 1980 Raza Bindu is pegged in the band of Rs 1.6-2 crore. In the same breath, an MF Husain untitled is hovering in the range of Rs 80 lakh to Rs 1 crore and Krishen Khanna’s ‘The Rider’ will go under the hammer in the range of Rs 36-45 lakh.

The contemporaries find Atul Dodiya’s ‘Random Verse’ priced at Rs 72-90 lakh and a Surendran Nair watercolour, Darwaaza Kholo, which is estimated at Rs 16-20 lakh. The Bengal School section is being led by the three Tagores, Rabindranath, Abanindranath and Gaganendranath. The Tagorean pieces are estimated between Rs 16 lakh and Rs 20 lakh.

In step, a large drawing by Nandalal Bose from the Ajanta series dated 1909-10 is valued at Rs 10-12 lakh and a set of 20 pencil and ink drawings by Jamini Roy are placed at Rs 12-15 lakh. The auction is also offering a Gaitonde drawing in the bracket of Rs 10 lakh. In the list are also a Bikash Bhattacharjee at Rs 48-60 lakh and Jogen Chowdhury’s ‘Two Women’ from 1994 going for Rs 40-50 lakh.

“We are also bringing some works by Palsikar, an influential teacher of the 1950s, who taught artists like Bendre, Kulkarni and Kolte. The Palsikar works are ranging anywhere near Rs 6-7 lakh mark. In tandem, the auction is placing under the hammer a set of 47 rare drawings by Serbjeet Singh on the Kashmir War, titled ‘Jojila’. Singh did these works at the site of the war in 1948. The drawings are priced at Rs 24-30 lakh,” Osian’s chairman Neville Tuli told ET.

Mr Tuli added: “The momentum is returning now on a much deeper level. This is also being spurred by financial institutions and museums which are renewing their collecting habits for Indian, Asian and Arab art. There is a major infrastructural change which is happening across the world as art is now being recognised as a credible capital asset for all medium and long-term portfolio. This auction will take forward the development of Indian film memorabilia market and show the continuous strength of the domestic art scene.”

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