Deputy Inspector-General of Police, Criminal Investigation Department, Bheemashankar S. Guled has urged the general public not to invest in ponzi schemes.
Awareness among the public about the illegality of such schemes and the dangers posed by them is necessary to protect their interests, Dr. Guled told reporters in Belagavi on Sunday.
“We have found that despite the arrest of Shivanand Neelannavar, promoter of Shivam Associates, who is facing the charge of running a ponzi scheme worth crores of rupees without regulatory approvals, people continue to deposit money with the firm.
“Hence, the need for this warning. We appeal to the people to be very careful with their financial management. They should not trust any agency that does not have regulatory approvals. They should not invest or deposit money in any agency linked with Shivam Associates or other such agencies,” he said.
He said that the State government has taken steps to freeze withdrawals from the accounts of Shivam Associates while credits are still open.
“We find that some people are not only investing money but also convincing others to do so. This is a dangerous practice and it should stop,” he said.
“We strongly request the public not to transfer any funds to Shivam Associates,” he said.
The Deputy Inspector-General of Police said that Shivam Associates does not have permission to seek or collect public deposits or invest them in the market or anywhere else. It has no approvals from RBI, SEBI or other agencies and no legal authority to collect deposits from the public.
“People should be wary of any individual or agency promising extraordinary returns in the range of 36%, 60% or higher annual interest rates. They are neither feasible nor are permitted under RBI regulations,” he said.
Shivanand Neelannavar described the funds received from investors as “hand loans”. However, following a recent High Court order, all such money collected amounts to deposits and can attract the provisions of the Karnataka Protection of Interest of Depositors (KPID) Act.
“It is a classic ponzi scheme where funds collected from new investors are used to pay returns to earlier investors. The promise of higher returns attracts people. The scheme continues as long as fresh money keeps coming in. Once new investments stop, such a pyramid inevitably collapses. The people need to understand this,” Dr. Guled said.
According to him, preliminary investigations revealed that Shivam Associates has collected at least ₹2,400 crore from 40,700 investors since 2016.
Of this, a substantial amount has been distributed as interest and payouts. However, CID officers found no evidence of any legitimate business activity generating profits sufficient to support the promised returns.
“The question remains, where was the profit coming from? The only answer seems to be that payments to investors were being made from fresh deposits received from new investors,” he said.
The probe showed that ₹540 crore of investor money was invested in the stock market. Of this, approximately ₹170 crore was lost after the staff of Shivam Associates exited their positions at losses.
CID officers found that a large part of the funds was diverted into various other businesses, though the profits generated were meagre.
There seems to be a shortfall of nearly ₹660 crore in the scheme. However, officers have detected assets worth over ₹400 crore, along with 250 grams of gold, gained by the promoters.
“This is a massive investigation involving thousands of transactions and tens of thousands of investors. It will take time. As and when evidence emerges, every transaction and every beneficiary will be investigated,” Dr. Guled said.
The investigation found some transfers from the firm’s accounts to personal accounts. CID officials stated that ₹55 crore was transferred from company accounts into Shivanand Neelannavar’s personal accounts.
The agency found that at least 19 luxury vehicles were purchased “using public money”.
Some of these assets have been secured. There is evidence to show that an additional ₹300 crore may be recovered through bank accounts, gold jewellery, luxury vehicles and real estate assets linked to the accused and his associates.
The CID is issuing notices to individuals who received payouts from Shivam Associates.
“If any person has received more money than they originally invested — whether termed interest, referral commission, incentive or by any other name, such amount may be subjected to recovery as per law. We will also issue notices to various individuals and entities that received payments from Shivam Associates to gather further information regarding funds flow,” he said.
The State government has appointed Amlan Aditya Biswas as the Competent Authority under the KPID Act. He will oversee attachment, liquidation and eventual distribution of recovered assets to eligible investors.
The transactions of Shivam Associates have spread over 30 banks. All of them are being studied. Seven accounts have been identified as having particularly high transaction volumes.
“In one account alone, the bank statement reportedly runs to more than 36,000 pages. All relevant documents and findings will be shared with the Income Tax Department and the Enforcement Directorate for further action,” he said.
Published – June 07, 2026 07:53 pm IST
