The Enforcement Directorate (ED) has made significant strides in its investigation into a large-scale fraud at the Andaman Nicobar State Cooperative Bank (ANSCB), with recent actions revealing a complex web of illicit financial activities. In its first-ever search operation in the Andaman & Nicobar Islands, the ED has seized documents indicating benami properties worth over ₹100 crore, allegedly acquired through the laundering of more than ₹500 crore in fraudulent loans.
The ED's investigation centers around alleged irregularities in loan disbursals by ANSCB, with a particular focus on the role of Kuldeep Rai Sharma, the former Member of Parliament from Andaman and Nicobar Islands and ex-vice chairman of the bank. Searches were conducted at nine locations in and around Port Blair, as well as two premises in Kolkata. These searches have yielded crucial evidence, suggesting that ANSCB extended loan and overdraft facilities to shell companies in violation of established banking norms.
The ED alleges that approximately 15 entities were established to illegally route funds, purportedly for the benefit of Kuldeep Rai Sharma. These entities are accused of fraudulently obtaining over ₹200 crore in loans, with substantial amounts withdrawn in cash and allegedly funneled to Sharma. According to officials, the searches are part of an ongoing money-laundering investigation connected to large-scale financial irregularities in loan disbursals by the cooperative bank. The ED initiated its investigation based on a First Information Report (FIR) registered by the Crime and Economic Offences Wing of the Andaman Nicobar Police against various private individuals and bank officials.
The investigation has revealed that loan facilities were extended to various shell companies, disregarding the bank's procedures and guidelines. It's alleged that the bank's managing committee overlooked recommendations from the loan screening committee and ignored CIBIL reports and mandatory documents while sanctioning loans. Evidence indicates that more than ₹500 crore in loans were fraudulently obtained through over 100 accounts. A significant portion of these funds was allegedly withdrawn in cash and paid to beneficiaries, including Sharma.
Sharma, who served as MP of the Union Territory from 2019 to 2024, was arrested by the Andaman and Nicobar Police on July 18. A court in Port Blair later remanded him to three days’ police custody on July 29. Along with Sharma, seven others, including the bank’s Managing Director and an employee, have also been arrested by the police in connection with the case.
Earlier this month, Manickam Tagore, Congress MP and the party’s in-charge for Andaman and Nicobar Islands, called the investigation politically motivated and intended to defame the Congress. He asserted that the party has no involvement in the bank’s affairs. The FIR also names several former board members, directors of the bank, and alleged beneficiaries.
