BENGALURU — The Enforcement Directorate has provisionally attached movable and immovable assets valued at ₹427.16 crore in connection with an alleged ₹2,459-crore Ponzi investment scam based in Belagavi, Karnataka. The action targets Shivanand Siddappa Neelannavar, identified as the primary accused in the case, along with his family members and linked entities. Agency officials stated that more than 35,000 investors were defrauded under the pretext of promising lucrative returns, with collected funds later channeled into speculative stock trades, property acquisitions, and personal accounts.
The attachment order was issued on Friday by the agency’s Mangaluru Sub-Zonal Office under provisions of the Prevention of Money Laundering Act, 2002. The total proceeds of crime in the case stand at roughly ₹2,459 crore. The seized wealth includes bank balances, fixed deposits, equity holdings, agricultural land, bungalows, and apartment bookings in various residential developments. In total, the agency has identified 42 immovable assets across Karnataka held either directly by the accused or through associated proxy networks.
Diversion into Equities and Cooperative Societies
Inquiries by the central agency established that a substantial share of public deposits was directed into high-risk stock market trading, which ultimately generated net trading losses amounting to ₹185.95 crore. Investigators also detected a structured arrangement involving local cooperative institutions to launder investor capital. Around ₹25 crore was routed through Shreemata Co-operative Credit Society Ltd. and Dhanashree Multipurpose Co-operative Society Ltd. to open fixed deposit accounts.
These credit society deposits were subsequently pledged as collateral to secure loans in the names of Neelannavar’s associates. According to investigators, the borrowed amounts were promptly diverted to purchase land parcels in the region. The financial routing formed part of an organized effort to obscure the criminal origin of the funds and convert cash collections into tangible real estate assets under different names.
Fund Transfers to Family Members and Businesses
A significant portion of the pooled investor capital was directly transferred into private bank accounts registered to Neelannavar’s immediate family. These beneficiaries included his wife, Sangeeta, and his minor son, Siddhant. The agency determined that funds were layered through various commercial fronts, including commercial ventures such as Shivam Sevaa (OPC) Pvt. Ltd., Shivam Lifeline Pvt. Ltd., and Shivam Foods.
Records gathered during the probe revealed that Shivam Sevaa (OPC) Pvt. Ltd. alone absorbed approximately ₹19 crore in diverted deposits. The agency determined that investor collections were systematically routed across multiple accounts and business entities to finance family-owned bungalows, agricultural tracts, and residential housing units before enforcement authorities stepped in.
Legal Action and Ongoing Probe Under PMLA
The central agency arrested Shivanand Neelannavar on August 13, 2026, following preliminary rounds of questioning regarding fund flows. On October 9, the agency escalated legal proceedings by filing a formal prosecution complaint before the Special PMLA Court in Mangaluru. The charge sheet names five accused individuals and corporate entities, including Neelannavar, initiating their trial under anti-money laundering legislation.
The current provisional attachment serves to legally freeze the properties and prevent any disposal of alleged crime proceeds pending trial. The agency noted that further investigations are underway to trace additional fund trails, unearth remaining institutional links, and locate other assets tied to the multi-crore investment scheme.
