BELAGAVI, May 17 -- The Malmaruti Police and the Belagavi District Administration officials arrested Shivanand Neelannavar, owner of the private investment firm Shivam Associates after allegations surfaced that the firm collected deposits from thousands of investors without mandatory approvals from the Reserve Bank of India (RBI) or the Securities and Exchange Board of India (SEBI).

According to the Belagavi Police, the firm lured gullible investors with the promise of high returns. Authorities suspect over 40,000 investors from Karnataka and Goa may be linked to the firm, though the final scale of the case will be determined after a detailed audit.

Shivanand was arrested from his residence at Shivabasavanagar despite circulating an aud...