Shivam Associates scam: Thousands fear loss as CID takes over probe

Belagavi: Panic and uncertainty have gripped thousands of investors who collectively invested lakhs and crores of rupees in an alleged Ponzi scheme run by Shivam Associates, following the arrest of its proprietor, Shivanand Neelannavar.

Preliminary investigations indicate that between 35,000 and 45,000 depositors from Karnataka and several other states had invested in the scheme. With investigating agencies seizing bank accounts and key documents linked to Shivam Associates, officials have initiated an in-depth verification process. The case has now been handed over to the CID for further investigation.

Amid these developments, anxious depositors have begun visiting the firm’s offices, while many others are contacting intermediaries through whom they had invested. Investigators said a significant number of investors include retired soldiers who deposited their provident fund savings, as well as farmers who invested proceeds from land sales.

City police commissioner Bhushan Borase said Neelannavar mobilised funds through a network of agents, referred to as ‘associates’, by offering attractive commissions. Notices are being issued to these associates, directing them to appear before investigators. Authorities are also attempting to trace them by tracking their mobile phones.

Most investors remain uncertain about the recovery process. Deputy commissioner Mohammad Roshan said the district administration is taking measures under the Karnataka Protection of Interest of Depositors in Financial Establishments (KPID) Act, 2004, to safeguard depositors’ interests.

“We are bound to follow due legal procedures and court directions. Depositors must submit documentary proof of their investments to a special cell that will be set up for this purpose,” Roshan said. He added that, prima facie, Shivam Associates appears to have operated without legal authorisation to collect deposits.

Highlighting the progress of the probe, the DC said a large number of transactions were carried out through cheques and online transfers, which will help authorities trace the money trail. “We have identified the banks, branches and accounts involved. Investigating agencies have been tracking these transactions for over one-and-a-half months,” he noted.

However, the decision to hand over the case to the CID has not gone down well with many depositors. They cited past financial fraud cases in the district, including those involving Krantiveer Sangolli Rayanna Souharda Cooperative Society and Sai Multi Services, where victims have been waiting for over a decade for recovery. In one such case, the accused, Sanjay Tenginkai, remains absconding.

Demand for CBI probe

Amid growing frustration, a section of depositors has questioned why the case was not transferred to the CBI. Speaking on condition of anonymity, some investors said funds were mobilised from multiple states, including Bihar and Uttar Pradesh, making it a large inter-state fraud. Given the scale — over 35,000 investors and transactions reportedly running into thousands of crores — many believe the case warrants a CBI probe to ensure a more comprehensive and timely investigation.