Belagavi sets up anti-fraud cell post Shivam Associates scam

Belagavi: In the wake of the multi-crore deposit scam involving Shivam Associates, the district administration has established a dedicated fraud prevention cell at the deputy commissioner’s office to monitor and curb illegal financial activities in the district.

A district coordination committee has also been constituted to oversee firms suspected of operating Ponzi schemes by luring investors with promises of abnormally high returns.

The initiative has been launched under the provisions of the Banning of Unregulated Deposit Schemes (BUDS) Act, 2019 and the Karnataka Protection of Interest of Depositors in Financial Establishments (KPID) Act, 2004. The latest amendment to the KPID Act empowers deputy commissioners to initiate preventive action based on preliminary evidence, even before large-scale frauds surface.

The newly formed cell will closely monitor inputs gathered from social media, news reports, public complaints and anonymous tips to identify suspicious financial operations at an early stage.

Deputy commissioner Mohammed Roshan cautioned citizens against investing in schemes offering unrealistic returns such as 3 to 4% monthly interest. “Even major banks cannot offer annual returns of 9%. Citizens must remain vigilant and avoid schemes that promise unusually high profits,” he said, warning that such investments carry significant risk and no guarantee of safety.

According to Roshan, preliminary information indicates that four to five firms in Belagavi district may be operating Ponzi-style investment schemes. Verification of suspicious financial transactions linked to these firms is currently underway. Referring to one company under scrutiny, he said it had allegedly collected crores of rupees from investors by promising returns of up to 5% per month.

“Strict action will be taken against the firms concerned once the inquiry reports are submitted. The police have already launched an investigation. The district administration is committed to safeguarding the interests of depositors and making every effort to help recover their money,” Roshan said.

The administration has become more vigilant after thousands of women across the district were allegedly duped in recent years by two major microfinance-linked Ponzi schemes involving investments worth crores of rupees. Learning from those incidents, the administration is now prioritising early detection and prevention of financial fraud.