The Enforcement Directorate (ED) has made its first-ever arrests in the Union Territory of Andaman and Nicobar Islands, detaining former Member of Parliament (MP) Kuldeep Rai Sharma and two others in connection with a money laundering case. The case is linked to an alleged fraudulent cooperative bank loan scheme amounting to over Rs 500 crore.
According to an official statement by the ED, the arrests were made under the Prevention of Money Laundering Act (PMLA). The others arrested were K. Murugan, the Managing Director of the Andaman Nicobar State Cooperative Bank (ANSCB), and K. Kalaivanan, a loan officer at the bank. Kuldeep Rai Sharma, a Congress leader, is a former chairman of the ANSCB.
The ED’s investigation alleges that the accused, in connivance with others, floated several shell companies and sanctioned large loans to them in “flagrant violation of the rules” of the bank. The primary intent, the agency claims, was not to repay the funds, which led to significant financial losses for the bank and its depositors.
Evidence collected so far suggests that a loan amount of approximately Rs 230 crore was fraudulently taken for the exclusive benefit of Sharma and his associates, including the managing director and loan officer.
The agency further alleged that Murugan and Kalaivanan had fraudulently availed loans in the names of their relatives and helped other associates obtain loans for a 5% commission, often received in cash or through the accounts of the shell companies.
The ED had previously conducted searches in July and August at multiple locations in Port Blair and Kolkata as part of its ongoing probe. The recent arrests mark a significant development in the case. A special PMLA court has sent the accused to eight days of ED custody for further questioning.
