The Directorate of Enforcement (ED) filed a prosecution complaint against five persons and entities, including alleged kingpin Shivanand Siddappa Neelannavar and his firm, Shivam Associates, for an alleged ₹2,459 crore Ponzi scam that cheated more than 35,000 investors. The complaint was lodged on October 9 before the III Additional District and Sessions judge in Mangaluru, seeking conviction in a 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 collected ₹2,459.49 crore by promising investors a guaranteed 3% monthly return and a 0.5% referral commission. The scheme allegedly used a portion of the money to pay earlier investors and to enrich the accused personally, while ₹2,125.60 crore remained unpaid to investors. Funds were diverted into high‑risk stock trading, property purchases, and film production.
The investigation revealed that ₹1,985.95 crore was lost in stock trading, and about ₹2.5 crore was routed through cooperative credit societies to create fixed deposits that were pledged as collateral for land loans. Funds were also transferred to the bank accounts of Neelannavar’s wife, Sangeeta, and minor son, Siddhant, as well as to associated business entities such as Shivam Sevaa (OPC) Pvt. Ltd., Shivam Lifeline Pvt. Ltd., and Shivam Foods. Additionally, ₹5 crore of pooled public deposits financed the commercial production of the Kannada feature film “Champion”.
In August 2026, the ED conducted searches at eight premises linked to the accused and their associates in Belagavi, Chikkodi, and Nipani. The searches yielded documents, handwritten audit notes, mobile devices, and software transaction records that helped trace the movement of alleged proceeds of crime. The investigation also uncovered a financial nexus between the accused, their family members, and several entities used in the transactions. Bank accounts and fixed deposits totaling ₹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.
