ED Issues Provisional Attachment In Shivanand Siddappa Neelannavar Ponzi Scheme

The Enforcement Directorate has provisionally attached assets worth Rs 427.16 crore belonging to Shivanand Siddappa Neelannavar and individuals and entities linked to him in connection with an alleged large-scale investment fraud operated through Shivam Associates. The attachment order was issued on 30 October 2026 under the Prevention of Money Laundering Act by the Mangalore Sub-Zonal Office of the agency. The ED announced the action in a press release on 31 October 2026.

According to the Enforcement Directorate, the alleged scheme collected around Rs 2,459.49 crore from more than 35,000 investors. The operation promised investors assured returns of 3 per cent every month along with an additional 0.5 per cent referral commission for bringing in new investors. Shivanand Siddappa Neelannavar is described by the agency as the person who exercised overall control over the fund flow of Shivam Associates.

The case originated from an FIR registered at Malamaruthi Police Station in Belagavi City under provisions of the Bharatiya Nyaya Sanhita, the Banning of Unregulated Deposit Schemes Act and the Karnataka Protection of Interest of Depositors in Financial Establishments Act. The Enforcement Directorate later took up the investigation under the Prevention of Money Laundering Act into the alleged laundering of the proceeds of the crime.

Shivanand Siddappa Neelannavar was arrested on 13 August 2026 under Section 19 of the PMLA.

He was produced before the Special Court dealing with PMLA matters in Mangaluru, which remanded him to ED custody for 12 days. In August 2026 the agency conducted searches at eight premises in Belagavi, Chikkodi and Nipani. During the searches the ED recovered incriminating documents, handwritten audit notes, mobile devices, software transaction records and other digital evidence. The search operation also led to the freezing of bank accounts and fixed deposits containing approximately Rs 2.02 crore that the agency said was derived from siphoned investor funds.

On 9 October 2026 the Enforcement Directorate filed a prosecution complaint against five accused persons and entities, including Shivanand Siddappa Neelannavar, before the III Additional District and Sessions Judge in Mangaluru. The complaint sought their conviction under the relevant provisions of the PMLA. The 31 October press release announcing the attachment did not name all five accused.

The ED has stated that a substantial portion of the money collected from new investors was used to repay earlier investors. This practice, according to the agency, helped maintain public confidence in the scheme and encouraged continued participation. The remaining funds were allegedly diverted through various channels. Reporting on the prosecution complaint indicated that the principal amount remaining outstanding and unpaid to investors stood at approximately Rs 2,125.60 crore.

The Enforcement Directorate has identified several routes through which the alleged proceeds were moved or used. A significant portion of investor funds was deployed in high-risk stock-market trading, resulting in net losses of Rs 185.95 crore. Approximately Rs 25 crore was routed through two cooperative credit societies — Shreemata Co-Operative Credit Society Ltd and Dhanashree Multipurpose Co-op Society Ltd. According to the agency, fixed deposits were created with these funds and the deposits were then used as security to obtain loans in the names of associates. The loan proceeds were allegedly used to purchase land parcels.

Funds were also channelled into the bank accounts of Shivanand Siddappa Neelannavar’s wife, Sangeeta, and his minor son, Siddhant. About Rs 19 crore was associated with M/s Shivam Sevaa (OPC) Private Limited, one of the connected business ventures. The ED has also named Shivam Lifeline Private Limited and Shivam Foods among the business entities into which funds were allegedly directed. Coverage of the prosecution complaint further reported that approximately Rs 5 crore collected from public deposits was diverted towards the commercial production of the Kannada feature film Champion.

The provisional attachment of Rs 427.16 crore covers four main categories of assets. Fixed deposits account for the largest share at Rs 367.78 crore. These deposits are maintained across HDFC Bank, ICICI Bank, IDFC First Bank, Kotak Mahindra Bank, Ujjivan Small Finance Bank and local cooperative societies. Bank balances of Rs 44.38 crore resting in 47 individual and corporate accounts form the second category. These accounts belong to primary operators, family members, associates and corporate entities.

Immovable properties valued at Rs 13.69 crore make up the third category. The ED has identified 42 specific properties that include agricultural plots, family bungalows and developer apartment bookings. Share-market holdings valued at Rs 1.32 crore complete the attachment. The remaining portfolio stock valuations were frozen inside CDSL depository accounts.

The Enforcement Directorate has clarified that the Rs 185.95 crore figure represents net losses from stock-market trading while the Rs 1.32 crore represents the residual share holdings identified and attached. The two figures refer to different aspects of the trading activity. Similarly, the approximately Rs 25 crore routed through the two cooperative societies forms part of the larger set of fixed deposits that have been attached. The Rs 2.02 crore frozen during the August searches is distinct from the broader provisional attachment of Rs 427.16 crore announced on 31 October.

An earlier report in August 2026 had referred to collections of approximately Rs 2,110.97 crore identified at that stage of the investigation. The figure of Rs 2,459.49 crore emerged later in connection with the prosecution complaint. The difference may reflect the identification of additional investors, transactions or associated entities as the investigation progressed.

The attachment order was issued under the second proviso to Section 5(1) of the PMLA. Under this provision the authorised officer may attach property if there is reason to believe that failure to attach it immediately is likely to frustrate proceedings under the Act. The attachment is provisional. The order and supporting material are required to be forwarded to the Adjudicating Authority. The affected persons will have the opportunity to contest the allegations during adjudication proceedings under Section 8 of the PMLA. Confirmation of the attachment, if ordered, and any subsequent confiscation will follow the statutory process.

The Enforcement Directorate’s investigation continues. The provisional attachment of assets valued at Rs 427.16 crore forms one part of the agency’s action so far in a case that involves alleged collections of Rs 2,459.49 crore from more than 35,000 investors and an outstanding principal amount reported at Rs 2,125.60 crore.