Shivam scam may run into Rs 7,000 crore, say experts

Belagavi: The alleged multi-crore deposit scam involving Shivam Associates, owned by Shivanand Neelannavar, has sent shockwaves across Karnataka, with fresh estimates suggesting the fraud could be far bigger than initially assessed.

Following raids on the company’s offices, the district administration had pegged the scam size at around Rs 4,600 crore. However, financial experts now believe the fraud may have crossed Rs 6,000 crore to Rs 7,000 crore, with the final figure likely to rise further once unaccounted cash deposits are included in the probe.

Preliminary findings suggest that more than 35,000 investors had deposited money with the firm, which allegedly operated without mandatory government approvals. A significant number of investors are said to be retired defence personnel and individuals holding unaccounted cash reserves. Investments were reportedly made through both banking channels and cash transactions.

Investigators said many depositors invested their life savings, including provident fund amounts, fixed deposits and, in some cases, proceeds from the sale of immovable properties, after being lured by promises of high returns. The company had allegedly been paying a monthly return of nearly 3% consistently for the past five to six years, helping it gain credibility and attract a growing number of investors.

Notably, there were reportedly no major complaints of payment defaults during this period, which further strengthened public confidence in the scheme.

Experts noted that the current estimates are largely based on transactions routed through banks, including cheques and digital transfers. However, substantial cash investments allegedly collected through unofficial channels are yet to be fully accounted for. Investigators believe inclusion of such deposits could significantly raise the overall scam size.

Calling it one of the biggest financial frauds reported in the state, a financial expert, speaking to TOI on condition of anonymity, said thousands of investors could face long-term financial distress following the collapse of the scheme.

Sources said Neelannavar allegedly diverted investor funds into real estate ventures, the film industry and alternative investments, including exchange-traded funds (ETFs) and cryptocurrencies.

Meanwhile, Neelannavar remains in police custody. The crime investigation department took him to Bengaluru on May 19 for further probe and is expected to produce him before a Belagavi court on May 28. Sources said the CID is likely to seek an extension of custody, citing alleged non-cooperation during interrogation.

Authorities have so far frozen 17 bank accounts linked to Shivam Associates as part of the ongoing investigation.