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|Premier art houses under I-T scanner||Views: 1180|
|Feb 28, 2009 9:16 am||Premier art houses under I-T scanner||#|
Art houses can use these fictitious purchase bills to set an inflated benchmark price for works by artists, causing genuine investors to pay more.
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 (Graphic)
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.
Private Reply to sachin kaluskar
|Feb 28, 2009 1:11 pm||boldest write u ever written abt Saffron n Osian's ever||#|
Thanks this is one of the boldest write u ever written abt Saffron n Osian's ever in the media!
Kudos to Livemint n the reorter!Here is the online link
This is a Must read
Private Reply to Jasmine Jehengir
|Feb 28, 2009 1:15 pm||re: boldest write u ever written abt Saffron n Osian's ever||#|
|Eye opening and scary!|
http://www.KIPL.Net - New Media Solutions
http://IndyChai.com - India's first Web 2.0 Hyper Aggregated
Private Reply to Mehul Patel
|Feb 28, 2009 8:09 pm||re: re: boldest write u ever written abt Saffron n Osian's ever||#|
U V Umesh
|This is just a tip of an iceberg, lot more will come out in the open as the saga unfolds......|
Umesh U V
Please see updated blogs:
Private Reply to U V Umesh
|Mar 01, 2009 7:08 am||boldest write u ever written abt Saffron n Osian's ever||#|
|I would request you to read what I had written about pricing and valuation of artists works, and how easily prices can be manipulated by the artists and the galleries. It is and will continue to be an issue, especially with transperancy being very limited.|
this is what I had posted on the Dhoomimal discussion
Jan 23, 2009 7:13 am re: re: Re: It's Raza @ Fault and not Dhoomimal! #
Hari Iyer My question remains Jasmine and I would appreciate if somebody could post half a satisfying reply to it
If a public limited company ( read so called past respected companies worldwide ) can, under public and law enforcing agencies eyes, wipe out 7500 crores with so many checks and balances, imagine what an artist, with an eccelectic mind, can do. finally he is the sole owner, maker and manipulator of his decision.
I still maintain it is too, too vague a field of valuation and method and it will successfully continue to haunt people in times to come
Private Reply to Hari Iyer
|Mar 02, 2009 5:04 am||re: boldest write u ever written abt Saffron n Osian's ever||#|
I agree with Hari. But then how does one justify the price quoted for a peice of Art?
Private Reply to Snigdha Sheel
|Mar 02, 2009 5:49 am||re: boldest write u ever written abt Saffron n Osian's ever||#|
With reference to the article in The Mint here are comments from Mr. Neville Tuli, Chairman - Osian's.
Link to his official blog: http://nevilletuli.blogspot.com/2009/02/these-are-points-we-would-like-to-make.html
Private Reply to Sonali Engineer