Former Andaman MP and Bank MD arrested in Rs.500 Crore Bank Fraud Case

The Enforcement Directorate (ED) has arrested former Andaman and Nicobar Islands member of parliament and Congress leader, Kuldeep Rai Sharma, and two others in connection with a money laundering case related to a fraud in the state cooperative bank.

Sharma is the former chairman of Andaman Nicobar State Cooperative Bank (ANSCB). He was taken into custody under the prevention of money laundering (PMLA) act along with K Murugan, the managing director of the bank, and K Kalaivanan, the bank’s loan officer. This is the first ever arrest made by ED in Andaman and Nicobar Islands in any PMLA case.

“ED Kolkata Zonal office has arrested three persons, Kuldeep Rai Sharma, ex-Member of parliament, Andaman and Nicobar Islands and ex-Chairman of Andaman and Nicobar State Cooperative Bank (ANSCBL); K Murugan and Kalaivanan in connection with a bank fraud case on Wednesday,” the agency said in a statement.

Who is Kuldeep Rai Sharma?

Kuldeep Rai Sharma (born 10 September 1967) is an Indian politician belonging to INC, who served as a member of Parliament from 2019 to 2024. He also served as President of Andaman and Nicobar Territorial Congress Committee until 2021. Later on, he was promoted by Congress President Sonia Gandhi as All India Congress Committee (AICC) secretary incharge for Indian National Congress in Karnataka.

How investigation started?

The investigation started from a first information report filed by the Crime and Economic Offences Cell, Andaman and Nicobar Police, against various private persons and officials of the bank.

The officials of Andaman Nicobar State Cooperative Bank Ltd including Kuldeep Rai Sharma and others sanctioned bank loans violating the guidelines. Several shell companies were created and they sanctioned large amount of loans to them as well as to their regular entities in violation of the rules. This led to huge loss to the bank.

Loan facilities were sanctioned through more than 100 loan accounts in the names of various firms and shell companies and the amount involved in the fraud/NPA (non-performing assets) exceeds ₹500 crore.

ED has so far collected evidence which indicates that a loan amount of ₹230 crores (approx.) was fraudulently taken exclusively for the benefit of Kuldeep Rai Sharma and his associates including the managing director and loan officer.

Investigation has also revealed that K Murugan and K Kalaivanan also fraudulently availed loans from the bank in the names of companies incorporated in the name of relatives.

“They helped their associates to obtain multiple loans in lieu of 5% commission which were made on the instructions of Kuldeep Rai Sharma. The commission amount was taken either in the form of cash or through associates by using the accounts of shell companies,” ED said.

The agency carried out raids in the case on July 31 and August 1. The investigation is ongoing and more details will be released soon.