The Karnataka Police’s Criminal Investigation Department (CID) said Sunday its investigation into the alleged multi-crore fraud committed by Belagavi-based Shivam Associates has disclosed that the firm collected about Rs 2,400 crore from more than 40,000 investors. In May, the Belagavi police arrested Shivanand Neelannavar, the promoter of Shivam Associates, in connection with the Rs 4,500-crore investment scam, under which the firm offered annual interest rates of 36 to 60 per cent to investors. Shivam Associates was closed after a complaint was filed at Malmaruti Police Station in Belagavi under the provisions of the Banning of Unregulated Deposit Schemes (BUDS) Act and the Karnataka Protection of Interest of Depositors in Financial Establishments (KPID) Act. Later, the case was handed over to CID. Bheemashankar S Guled, Deputy Inspector-General of Police, CID, said they were forced to hold a press conference as people were still investing money even though the accounts of Shivam Associates had been frozen. "Even after the fraud has come to light, people have invested about Rs 5 crore into the firm," Guled said, adding that even government officials had invested money. The senior officer also said the firm paid actor Sunny Leone to act in a movie, among others, from the money collected from investors. Guled said that, as of now, CID has found that the firm collected Rs 2,400 crore from the public by promising higher interest rates. “Shivanand Neelannavar collected the money and never made a profit in any business. His firm invested Rs 540 crore in the stock market and incurred a loss of Rs 170 crore. Throwing all the rules and regulations in the air, he diverted Rs 55 crore to his personal accounts," he said. “He only gave investors the money accrued through interest. There are about 40,700 investors from Karnataka and Maharashtra. We are looking for Shivanand’s partner in Maharashtra,” Guled said. CID said it is yet to trace Rs 660 crore and that assets worth Rs 390 crore have been identified in various forms. It also found that the firm gave Rs 400 crore to the investors. As many as 30 bank accounts have been frozen by CID, and the firm’s deposits and withdrawals are likely to exceed 50 lakh. Known for his lavish lifestyle, CID claimed that Shivanand owned a Toyota Vellfire priced at around Rs 1.20 crore, two Mercedes-Benz cars, a Land Rover Defender, 11 Volvo XC90s, and more. The police have seized 19 vehicles, and 11 registered in Maharashtra remain to be seized.
