The Directorate of Enforcement (ED), Mangaluru, conducted search operations on 7 August 2025 at multiple premises in Belagavi, Chikkodi, and Nipani in Karnataka, targeting locations linked to Shivam Associates, its principal Shivananad Siddappa Neelannavar, and associated persons and entities in an alleged investment fraud and money-laundering case estimated at ₹2,110.97 crore. The searches were carried out under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.

Background and FIR

The ED launched its investigation on the basis of a First Information Report (FIR) registered by Malamaruthi Police Station in 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 FIR, members of the public were allegedly induced to invest money on the promise of abnormally high and assured returns — a hallmark pattern in Ponzi-style schemes.

How the Alleged Fraud Operated

Investigators allege that Neelannavar lured depositors by promising a return of 3 per cent per month on their investments — an annualised yield of 36 per cent that regulators and courts have consistently flagged as a red flag for unregulated deposit schemes. A commission of 0.5 per cent was allegedly paid to leaders or agents who channelled members of the public into making investments, effectively creating a referral network to widen the depositor base.

Preliminary analysis of bank accounts and financial records, according to the ED, revealed extensive and interconnected movement of funds through business, personal, and intermediary accounts — including transfers to stock brokers, fixed-deposit accounts, related persons, and other beneficiaries.

Financial Nexus Identified

The agency said it identified a financial nexus among Shivam Associates, Neelannavar, Subhash Ramagouda Nandaragi, Mahesh S. Neelannavar, Shivam Productions, Shivan Lifeline Pvt. Ltd., and Shivam Sevaa (OPC) Pvt. Ltd., along with other associated persons and entities. The alleged total mobilisation from the public stands at approximately ₹2,110.97 crore.

Of this, repayments totalling approximately ₹333.89 crore have been identified during the search operation. Consequently, proceeds of crime amounting to approximately ₹1,777.08 crore remain untraced, according to the ED.

Evidence Seized, Investigation Ongoing

During the searches, the ED recovered and seized incriminating documents and digital evidence relating to the alleged generation, movement, layering, and parking of proceeds of crime. Records relating to monetary transactions, diversion of funds, investments in immovable properties, and dealings with various associated persons and entities were also recovered.

The ED stated that the seized material and digital evidence is being examined and that further investigation is underway. This case is part of a broader pattern of ED action against unregulated deposit schemes across Karnataka and other states in recent years.