The Enforcement Directorate (ED) has filed a prosecution complaint against five persons and entities, including Shivanand Siddappa Neelannavar (Belagavi) and his firm Shivam Associates, in connection with an alleged ₹2,459 crore Ponzi scam involving more than 35,000 investors.
According to the ED’s press release dated October 10, 2026, the complaint was filed before the III Additional District and Sessions Judge in Mangaluru on October 9. The agency has sought the conviction of the accused in the money-laundering case.
Neelannavar, described by the ED as the alleged kingpin, was arrested on August 13, 2026, and is currently in judicial custody.
Investors were promised 3% monthly returns
The ED’s investigation found that Neelannavar allegedly operated a fraudulent investment network through Shivam Associates and other entities.
According to the agency, the network collected ₹2,459.49 crore from more than 35,000 investors by promising assured monthly returns of 3% and an additional referral commission of 0.5% for bringing in new investors. Neelannavar reportedly referred to the network’s agents as “leaders”.
The ED alleged that most of the money collected was used to repay earlier investors, helping sustain the scheme and maintain public confidence. A portion was allegedly diverted for personal enrichment.
The agency stated that ₹2,125.60 crore in principal remained outstanding and unpaid to investors.
Money allegedly diverted into stock trading and property
The investigation found that the alleged proceeds of crime were routed through multiple channels.
According to the ED, high-risk stock market trading resulted in net losses of ₹185.95 crore.
Around ₹25 crore was allegedly routed through 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 obtain loans in the names of associates to purchase land.
The agency also alleged that funds were transferred to the bank accounts of Neelannavar’s wife, Sangeeta, and minor son, Siddhant, along with accounts of associated business entities.
These included Shivam Sevaa (OPC) Pvt. Ltd., which allegedly received ₹19 crore, Shivam Lifeline Pvt. Ltd. and Shivam Foods.
The ED further alleged that ₹5 crore from pooled public deposits was used to finance the commercial production of the Kannada feature film Champion.
₹2.02 crore frozen after searches in Belagavi district
In August 2026, the ED conducted extensive searches at eight premises linked to the accused and their associates in Belagavi, Chikkodi and Nipani.
The searches led to the recovery of documents, handwritten audit notes, digital evidence, mobile devices and software transaction records. The agency said the material helped establish the movement of suspected proceeds of crime and the alleged operation of the investment network.
The investigation also uncovered what the ED described as financial links between the principal accused, family members and several associated entities.
Bank accounts and fixed deposits containing ₹2.02 crore, allegedly derived directly from investor funds, were frozen.
Case originated from Belagavi police FIR
The money-laundering investigation began following an FIR registered by the Malamaruthi Police Station in Belagavi.
The FIR invoked provisions of 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.
The ED said further investigation is in progress. The allegations against the accused remain subject to judicial proceedings.