BENGALURU: The Directorate of Enforcement (ED), Mangaluru sub-zonal office, on August 13 arrested Shivanand Siddappa Neelannavar, in the alleged multi-state and multi-crore unsustainable Ponzi-style scheme case, under the Prevention of Money Laundering Act (PMLA).
Neelannavar was arrested under Section 19 of the PMLA and produced before the Special Court (PMLA), Mangaluru, which remanded him in ED custody for 12 days. "He is the 'whole and sole' person managing the fund flow of Shivam Associates," the ED stated.
The agency had initiated investigation on the basis of an FIR registered by Malamaruthi police station, Belagavi city, under the Banning of Unregulated Deposit Schemes Act and Karnataka Protection of Interest of Depositors in Financial Establishments Act.
As per the FIR, some members of the public were induced to invest funds on the promise of abnormally high and assured returns. The ED stated that Shivam Associates collected Rs 2,110.97crore from investors while only accounting for a fraction in repayments.
The investigation unearthed that the firm "suffered severe, compounding losses in the stock market since 2019.