In a significant move, the Enforcement Directorate (ED) has, for the first time, directly entered the Port Blair leg of an investigation into a substantial bank scam. The ED conducted searches at multiple locations in and around Port Blair, as well as in Kolkata, marking its first-ever enforcement action in the Andaman and Nicobar Islands. This action is part of a money laundering case concerning alleged fraud of over ₹200 crore involving a former Member of Parliament and officials of the Andaman Nicobar State Cooperative Bank (ANSCB).

The ED's investigation is centered on Kuldeep Rai Sharma, a former Congress MP who represented the islands in the Lok Sabha from 2019 to 2024 and also served as the Vice-Chairman of ANSCB. Sharma was arrested by the Island police on July 18 and is considered the prime accused in the case. The allegations involve misappropriation of bank funds through the issuance of loans to shell entities and subsequent laundering of the proceeds.

According to sources within the ED, the investigation has revealed that loan facilities were extended to various shell companies and firms, with approximately 15 such entities allegedly created for the benefit of Kuldeep Rai Sharma. These entities purportedly fraudulently obtained loans exceeding ₹200 crore from ANSCB. A significant portion of these loans was reportedly withdrawn in cash and paid to beneficiaries, including Sharma.

The searches conducted by the ED at nine locations in Port Blair and two in Kolkata were carried out under the provisions of the Prevention of Money Laundering Act (PMLA). These searches led to the recovery of various incriminating documents that point towards large-scale irregularities in the granting of loans and overdraft facilities by ANSCB. Evidence indicates that loan facilities were extended to shell companies while disregarding the bank's established procedures and guidelines.

The case originated from an FIR registered by the Crime and Economic Offences Wing of the Andaman Nicobar Police, which detailed large-scale irregularities in the granting of loans and overdraft facilities by ANSCB. The police have already arrested at least eight individuals, including Sharma and other bank officials. A special court granted the police custody of Sharma for further interrogation on July 29. The ED may seek his custody after the police investigation to identify properties purchased using the "proceeds of crime" and attach them.

The ED's action underscores the agency's focus on combating financial crimes, even in the country's most remote regions. The investigation is ongoing, and the ED is expected to summon several individuals linked to the case for questioning in the coming days.