Ponzi shocker: Rs 4,600cr fraud trail, CID likely to step in soon

Belagavi: The Belagavi assistant commissioner (AC) and officials of the cooperative department have completed a preliminary probe after a nearly 24-hour search at offices linked to Shivam Associates, owned by Shivanand Neelannavar. The raid, launched on Thursday evening over allegations of a money-circulation Ponzi scheme, led to the seizure of key financial documents.

The action was carried out under the Karnataka Protection of Interest of Depositors in Financial Establishments (KPID) Act, 2004, on directions of deputy commissioner Mohammad Roshan. The operation involved officials from the AC’s office, registrar of cooperative societies and the police, following instructions from Amlan Aditya Biswas, the state’s KPID nodal officer. The Act empowers authorities to act against fraudulent entities, including attaching properties and facilitating recovery of public deposits through special courts.

Preliminary findings suggest about Rs 4,600 crore may have been mobilised from nearly 45,000 investors across the state through an alleged pyramid-style scheme. Officials searched two offices of Shivam Associates and an apartment flat, seizing documents related to financial transactions for further scrutiny.

Sources said AC Shravan Nayak submitted a detailed preliminary report to the DC on Friday. Senior police officials indicated the crime investigation department (CID) may take over the probe soon. However, police commissioner Bhushan Borase said no formal complaint has been registered yet due to the absence of complainants.

Investigators believe Neelannavar launched the scheme during the Covid-19 period and rapidly built a network involving thousands of crores. Sources said high commissions were allegedly offered to expand the network, with funds routed into businesses such as import-export, real estate and commodity trading.

Amid the developments, Ashok Neelannavar released an audio message to reassure investors, urging them not to panic and saying the situation would be resolved within two to three days.