CID uncovers huge deposit fraud in Shivam Associates case

Belagavi: The Criminal Investigation Department (CID) has confirmed large-scale financial fraud in the Shivam Associates investment scheme, with investigators revealing that the firm’s owner, Shivanand Neelannavar, collected approximately Rs 2,400 crore from more than 40,700 investors through an unauthorised deposit network.

Addressing a press conference in Belagavi, CID Deputy Inspector General Bhimashankar Guled said the investigation has established that the company operated on a model in which money collected from new investors was used to pay returns and interest to existing investors.

According to the CID, Neelannavar mobilised investments from around 40,700 people. While a substantial portion of the money was returned to investors in the form of interest and payouts, the model depended heavily on the continuous inflow of fresh deposits. Once the amount required for interest payments exceeded incoming investments, the operation became unsustainable.

Investigators found that nearly Rs 540 crore of investor funds had been invested in the stock market, resulting in losses of about Rs 170 crore. So far, the CID has identified a financial shortfall of approximately Rs 660 crore. Officials believe that nearly Rs 330 crore can still be recovered through ongoing legal and financial proceedings.

The probe has also revealed that Neelannavar allegedly diverted Rs 55 crore of company funds for personal use. Authorities have already seized five luxury vehicles and are preparing to confiscate 11 additional Volvo XC90 cars allegedly purchased using investor money.

Officials disclosed that around Rs 400 crore was paid to certain investors in excess returns. The CID plans to recover those funds and redistribute them among other affected investors. Investigators have identified 30 bank accounts connected to the operation, with seven accounts showing particularly high-value transactions.

Surprisingly, officials noted that investors continued depositing money into Shivam Associates even after an FIR was registered. Nearly Rs 4 to Rs 5 crore was reportedly invested after the criminal case was filed.

The CID has also warned that notices may be issued to celebrities or public figures if investigations reveal they received money from the company. Authorities are working closely with police in Maharashtra, where a large number of investors are believed to be located.

Officials further cautioned the public against investing in schemes promising returns of 36 per cent to 60 per cent, stating that neither Shivam Associates nor Adityaraj Capital possessed the necessary regulatory approvals from the Reserve Bank of India to collect public deposits. Recovered assets will eventually be transferred to the competent authority under the BUDS Act for distribution among investors.