ED attaches assets worth Rs 427 crore in Rs 2,459-crore Karnataka Ponzi case

Belagavi businessman Shivanand Neelannavar was arrested on August 13. (File Photo)

The Enforcement Directorate (ED) has provisionally attached assets worth Rs 427.16 crore belonging to businessman Shivanand Neelannavar and people and entities linked to him in connection with an alleged Rs 2,459 crore Ponzi scheme operated from Karnataka’s Belagavi.

ED said Saturday it has attached Rs 367.78 crore in fixed deposits across multiple banks, Rs 44.38 crore in bank balances, and Rs 13.69 crore in immovable properties, and has frozen Rs 1.32 crore worth of shares.

ED has already filed a chargesheet before the court in the case and has continued the investigation.

The agency’s investigation was based on an FIR registered by the Malamaruthi police station in Belagavi city under the Bharatiya Nyaya Sanhita (BNS), the Banning of Unregulated Deposit Schemes Act, 2019, and the Karnataka Protection of Interest of Depositors in Financial Establishments (KPID) Act, 2004.

According to ED, Neelannavar and his associates collected Rs 2,459.49 crore from more than 35,000 investors. They allegedly promised “abnormally high, assured returns” of 3 per cent a month, along with a 0.5 per cent commission for bringing in new investors. Neelannavar allegedly introduced the network’s referral agents as “leaders”.

In August 2026, ED searched eight premises linked to the accused in Belagavi, Chikkodi, and Nipani. It said it recovered documents, handwritten audit notes, mobile devices, and software transaction records, which it says confirmed the generation, movement, and parking of the proceeds of crime.

The agency also froze bank accounts and fixed deposits holding Rs 2.02 crore derived from investor funds.

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Neelannavar was arrested in May. On October 9, ED filed a prosecution complaint against five accused and entities, including Neelannavar, before a court dealing with cases filed under the Prevention of Money-Laundering Act in Mangaluru.

ED said that a large part of the investor funds was gambled on high-risk stock trading, resulting in net losses of Rs 185.95 crore. About Rs 25 crore was routed through two cooperative societies, Shreemata Co-Operative Credit Society Ltd and Dhanashree Multipurpose Co-op Society Ltd, to create fixed deposits that secured loans in the names of associates, who allegedly used them to buy land.

The agency said funds also went to the bank accounts of his wife and minor son, and to related businesses, including Shivam Sevaa (OPC) Pvt Ltd (Rs 19 crore), Shivam Lifeline Pvt Ltd, and Shivam Foods.