Rs 4,500 crore fraud: Belagavi court grants CID 10-day custody of key accused Shivanand Neelannavar
The Belagavi police arrested Neelannavar, the founder of Shivam Associates, last Friday in connection with the alleged Ponzi-style investment scheme.
CID has frozen as many as 30 bank accounts of Belagavi-based Shivam Associates. (Special Arrangement) A court in Karnataka’s Belagavi on Monday remanded Shivanand Neelannavar, the prime accused in the alleged Rs 4,500-crore investment scam, to the Criminal Investigation Department (CID)’s custody for 10 days.
Neelannavar, the promoter of Shivam Associates, was produced before the 2nd Additional District and Sessions Court after the case was transferred to CID. Seeking custodial interrogation, a CID team led by Kodandarama, Deputy Superintendent, moved an application requesting 14 days’ custody of the accused.
After hearing submissions from both sides, Judge Gangadhar K N granted 10 days’ CID custody.
During the proceedings, Neelannavar told the court, “35,000 people do not want their money; they want me.” Responding to the remark, the judge observed that innocent citizens should not suffer injustice and said it was the government’s responsibility to protect the public.
“You may have done good for people, but protecting innocent citizens is the duty of the government,” the judge said.
Referring to previous financial fraud cases in which investors allegedly lost money after depositors absconded, the court noted that laws had been enacted to prevent such incidents. The judge also cited the Sanskrit phrase “dharmo rakshati rakshitah”.
Counsel appearing for Neelannavar submitted that his client was willing to return the investors’ money. However, the court said the issue was not under consideration at this stage and declined to discuss it further.
When the court inquired about Neelannavar’s health, he said he was suffering from diabetes and heart-related ailments. The judge directed officials to ensure proper medical care and medicines through authorised doctors while he remains in custody.
The court also directed CID officials to ensure the accused’s safety while in custody.
What is the Shivam Associates case?
The Belagavi police arrested Neelannavar last Friday in connection with the alleged Ponzi-style investment scheme.
The case, originally registered at the Malmaruti Police Station in Belagavi, against him and his associates under the provisions of the Banning of Unregulated Deposit Schemes (BUDS) Act, and the Karnataka Protection of Interest of Depositors in Financial Establishments (KPID) Act, is now being investigated by CID.
Investigators are probing the alleged diversion and investment of funds collected from investors.
Mohammed Roshan, Deputy Commissioner, said Saturday investigators were examining digital and documentary evidence seized during raids at the offices of Shivam Associates and premises linked to Neelannavar.
Roshan said a financial scam cell has been set up in the deputy commissioner’s office to enforce provisions of the BUDS Act and the KPID Act.
Officials had reportedly been monitoring Neelannavar’s activities for several months.
In a related development, CID detained a Maharashtra-based man, Omkar, for allegedly attempting to delete data linked to the “Acumen” app. Officials have also frozen more than 20 bank accounts, including three accounts belonging to Neelannavar’s wife, as part of the ongoing investigation.
A probe led by Assistant Commissioner and Sub-Divisional Magistrate Shravan Nayak culminated in a 150-page report, which concluded that Shivam Associates lacked legal authorisation to collect deposits, issue loans, or conduct financial transactions with the public.
According to officials, most transactions were carried out through banks, cheques, and app- or web-based investment platforms, and steps were initiated to freeze accounts linked to the alleged operations.
The police also recovered pamphlets and social media promotional material allegedly promising returns of 36 per cent on a minimum investment of Rs 1 lakh.
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