The Directorate of Enforcement (ED), Mangalore Sub-Zonal Office, has arrested Shivanand Siddappa Neelannavar, described by the agency as the “whole and sole” person managing the fund flow of M/s Shivam Associates, in connection with an alleged multi-state, multi-crore Ponzi-style scheme.
Neelannavar was arrested on August 13, 2026, under Section 19 of the Prevention of Money Laundering Act (PMLA), 2002. He was produced before the Special Court (PMLA), Mangalore, which remanded him to ED custody for 12 days, up to August 24.
The ED investigation was initiated based on an FIR registered by the Malamaruti Police Station, Belagavi City, under the Banning of Unregulated Deposit Schemes Act, 2019, and the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004.
According to the ED, investors were allegedly lured with promises of unusually high and assured returns. The agency said its investigation has uncovered an organised Ponzi-style operation spanning Karnataka, Maharashtra, Goa and Chhattisgarh.
The ED has alleged that Shivam Associates mobilised ₹2,110.97 crore from public investors by promising monthly returns of 3%. A digital mapping system and referral network were allegedly used to attract investors, with independent advisers receiving a 0.5% referral commission.
The investigation further found, according to the ED, that the firm had suffered substantial and compounding losses in the stock market since 2019. To conceal the losses and maintain investor confidence, fresh deposits from new investors were allegedly used to meet interest obligations to earlier investors.
The agency has also alleged that funds were layered and routed through various personal accounts, family members and allied entities, including Shivam Sevaa (OPC) Pvt. Ltd. and Shivam Productions.
According to the ED, the funds were allegedly used for purchasing luxury vehicles, constructing high-value bungalows, acquiring properties in the names of nominal partners and financing movie productions.
The ED has identified the allegedly misappropriated funds as “proceeds of crime” under the PMLA. The agency said further investigation is underway to trace the remaining liabilities and establish the complete flow of funds.