National Gallery of Australia to receive $1.2 million refund for 'stolen' Buddha statue

The National Gallery of Australia will receive a refund of more than $1.2 million for a 2,000-year-old stone statue of Buddha after it was revealed it may have been stolen.

The Canberra-based gallery, which has been involved in provenance issues before, announced in January it would return the Seated Buddha statue to India.

The dealer has now agreed to refund the purchase price.

The work, from the Mathura region of Uttar Pradesh, was purchased in 2007 from Nancy Wiener Gallery (NWG), a New York antiquities dealer, with funds from Roslyn Packer, the widow of the late Kerry Packer.

The NGA said that at the time of purchase, it regarded the information available about the sculpture as adequate.

But as a result of new research and in light of the recently published Australian Government guidelines for collecting cultural material, it was now "unclear" whether the work's export from India complied with current Australian law, the gallery said.

"Given the passage of time, the NGA is of the view that further clarification on this issue is unlikely," the NGA said in a written statement.

"Accordingly, the NGA and NWG have agreed that the best course is to donate the work to a museum or other cultural institution located in India."

'Nancy Wiener Gallery wanted to do the right thing'

NGA director Gerard Vaughan said while the NWG affirmed its confidence in the provenance of the Seated Buddha, it had offered to refund the purchase price.

"The Nancy Wiener Gallery wanted to do the right thing too," he told 666 ABC Canberra.

"They said 'look when we sold it to you, we sold it to you in absolute good faith. We see your problem and we're going to help you out... You'll get your money back and India gets the sculpture back'.

"It really is a win-win."

NWG president Nancy Wiener said her gallery respected the new policies at the NGA and the new standards of the Australian Government towards the stewardship of antiquities.

"We have endeavoured to find an agreeable resolution for both parties," she said.

An appropriate destination for the statue in India is still being determined.

Last year the NGA announced it would investigate the ownership history of 54 items in its collection, as part of efforts to review the provenance and legal status of works.

It came after another statue, the so-called Dancing Shiva, a 900-year-old bronze statue from the gallery's collection was returned to India because it was found to be stolen from a temple.

The NGA bought that statue for $5 million in 2008 from disgraced New York art dealer Subhash Kapoor, who is now facing charges in India over his business dealings.

Prime Minister Tony Abbott returned the statue to Indian prime minister Narendra Modi, along with another stone sculpture.