Bengaluru: ED Arrests Shivam Associates Promoter in Rs 2,110 Crore Ponzi Scheme Case
Bengaluru, Aug 14 (TNT): The Directorate of Enforcement (ED) has arrested Shivanand Siddappa Neelannavar, allegedly the key person managing the funds of M/s Shivam Associates, in connection with a multi-state Ponzi-style scheme and money laundering case.
The ED’s Mangalore Sub-Zonal Office arrested Neelannavar on August 13 under Section 19 of the Prevention of Money Laundering Act (PMLA), 2002, the agency said in a release.
He was produced before the Special Court (PMLA), Mangaluru, which remanded him to ED custody for 12- days till August 24.
According to the ED, the investigation was initiated based on an FIR registered by the Malaramuthi 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.
The investigation revealed that Shivam Associates allegedly operated a multi-state Ponzi scheme and mobilised around Rs 2,110.97 crore from public investors by promising monthly returns of three per cent.
The firm allegedly operated an extensive referral network across Karnataka, Maharashtra, Goa and Chhattisgarh, with investors being offered referral incentives to bring in new participants.
The ED alleged that the scheme was unsustainable and that funds collected from subsequent investors were diverted to meet interest obligations to earlier investors.
The agency said the firm had suffered substantial losses in the stock market since 2019 and had accounted for only a fraction of its repayment obligations.
During the investigation, the ED found that funds were allegedly layered through various personal accounts, family members and allied entities, including Shivam Seva (OPC) Pvt Ltd and Shivam Productions.
The agency alleged that the diverted funds were used for acquiring luxury vehicles, constructing high-value properties and purchasing assets in the names of associates and relatives. It said the funds were also routed into movie productions.
The ED has identified the allegedly misappropriated funds as proceeds of crime under the PMLA and said further investigation is underway to trace the remaining liabilities and the flow of funds.
TNT KS
