BELAGAVI: The Malmaruti Police and the Belagavi District Administration officials arrested Shivanand Neelannavar, owner of the private investment firm Shivam Associates after allegations surfaced that the firm collected deposits from thousands of investors without mandatory approvals from the Reserve Bank of India (RBI) or the Securities and Exchange Board of India (SEBI).
According to the Belagavi Police, the firm lured gullible investors with the promise of high returns. Authorities suspect over 40,000 investors from Karnataka and Goa may be linked to the firm, though the final scale of the case will be determined after a detailed audit.
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Shivanand was arrested from his residence at Shivabasavanagar despite circulating an audio message in which he claimed he was at home and assured depositors that he would “resolve the issue within the next two to three days.”
Speaking to media persons in the presence of District Magistrate Mohammed Roshan, Belagavi City Police Commissioner Bhushan G Borse said that the FIR was registered against Shivanand based on a complaint from the Assistant Registrar of Cooperative Societies (RCS).
This case constitutes a serious economic offence under the KPID (KPID-2004) as well as the relevant Sections of the Banning of Unregulated Deposit Schemes (BUDS) Act. Karnataka Police Rules and the Bharatiya Nyaya Sanhita (BNS).
He said that Shivanand, through his firm was soliciting deposits from the public with the promise of three percent returns every month. Prima facie thousands of people gave him their deposits. These funds were subsequently diverted for various other activities.
Shivanand was enticing people with an attractive offer: Invest Rs 1 lakh and earn Rs 3,000 monthly interest.
Borse stated that the accused was instilling fear among the public by claiming to possess 15,000 firearms. After accepting money from depositors, he would issue blank cheques as security. The police suspect that illegal transactions amounting to approximately Rs 300 to Rs 400 crore were conducted annually.
The accused was collected deposits since 2026 and established Shivam Associates in 2020.
The fraud has severely affected retired employees, farmers and middle-class families. Investigations have revealed that several people mostly from Belagavi, Chikkodi, Nipani, Goa and areas bordering Maharashtra invested their pension savings, while others deposited money raised through the sale of land and property.
The administration, however, has assured the panicked investors that efforts are underway to protect their interests and has appealed to them to come forward and formally lodge their complaints.
He said the raids were conducted at the offices and residence of the accused.
According to Borse, prima facie the magnitude of the offence is in crores of rupees and definitely more than Rs 50 crore. As per the Karnataka Police guidelines, the case will be transferred to the CID. Until the CID takes over investigations, the Malmaruti Police will continue investigations.
The Karnataka government has ordered a transfer of the investigation to the CID, following Shivanand’s arrest.
Belagavi District Magistrate Mohammed Roshan warned the public against investing in schemes offering unusually high returns, stating that institutions promising exorbitant rates of interest are often operating illegally. He advised citizens not to invest money in any institution that does not feature on the official list maintained by the RBI and urged people to remain vigilant.
