A file photo of Shivanand Siddappa Neelannavar.
| Photo Credit: SPECIAL ARRANGEMENT
The Directorate of Enforcement (ED) has filed a prosecution complaint against five persons and entities, including alleged kingpin Shivanand Siddappa Neelannavar and his firm, Shivam Associates, in connection with an alleged ₹2,459 crore Ponzi scam, cheating more than 35,000 investors.
The complaint was filed before the III Additional District and Sessions judge in Mangaluru on October 9, seeking the conviction of the accused in the money-laundering case.
Neelannavar was arrested on August 13, 2026, and is currently in judicial custody.
According to the ED investigation, Neelannavar and his associates allegedly collected ₹2,459.49 crore by promising investors assured returns of 3% per month and a referral commission of 0.5% for bringing in new investors. Neelannavar reportedly referred to the network’s agents as “leaders”.
The agency alleged that a substantial portion of the collected money was rotated to repay earlier investors and sustain confidence in the scheme, while the remaining funds were diverted for personal enrichment. The principal amount of ₹2,125.60 crore allegedly remained unpaid to investors.
Funds diverted into stock trading, property and film production.
The investigation allegedly revealed that substantial amounts of investor money were deployed in high-risk stock trading, resulting in net losses of ₹185.95 crore.
Around ₹25 crore was allegedly routed through cooperative credit societies, including Shreemata Co-operative Credit Society Ltd. and Dhanashree Multipurpose Co-operative Society Ltd. The funds were reportedly used to create fixed deposits, which were then pledged to secure loans in the names of associates to purchase land.
The ED also alleged that funds were transferred to the bank accounts of Neelannavar’s wife, Sangeeta, and minor son, Siddhant, as well as to associated business entities. Shivam Sevaa (OPC) Pvt. Ltd. allegedly received ₹19 crore, while Shivam Lifeline Pvt. Ltd. and Shivam Foods were also identified as connected ventures.
In another alleged diversion, ₹5 crore from pooled public deposits was used to finance the commercial production of the Kannada feature film Champion.
₹2.02 crore frozen
The ED conducted searches on eight premises linked to the accused and their associates in Belagavi, Chikkodi and Nipani in August 2026. The searches allegedly led to the seizure of documents, handwritten audit notes, mobile devices and software transaction records, which the agency said helped establish the movement of alleged proceeds of crime.
The investigation also revealed an alleged financial nexus between the accused, their family members and several entities used in the transactions. Bank accounts and fixed deposits containing ₹2.02 crore belonging to key associates were frozen.
The case originated from an FIR registered by the Malamaruthi Police Station in Belagavi under the Bharatiya Nyaya Sanhita, 2023, the Banning of Unregulated Deposit Schemes Act, 2019, and the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004.
Published – October 10, 2026 08:04 pm IST
