The Enforcement Directorate (ED) on Wednesday has arrested one more person in a money laundering case linked to an alleged Rs 500-crore cooperative bank fraud in the Andaman and Nicobar Islands. A Port Blair-based hotelier was arrested for procuring hefty loans allegedly through fraudulent means for business purposes.
“Today, we arrested Sanjay Lal and he was sent to judicial custody. Our team of officers from Kolkata is camping in Port Blair and further investigation is underway,” the ED official said.
The ED had last month arrested former MP from Andaman and Nicobar Islands and Congress leader Kuldeep Rai Sharma along with two others in connection with the alleged scam.
The case pertains to an over Rs 500 crore worth “fraud” allegedly committed by the officials of Andaman Nicobar State Cooperative Bank (ANSCB), including Sharma, and others, who were responsible for sanctioning loans. These persons, in connivance with their accomplices, floated several shell companies and sanctioned large loans to them as well as to their regular entities in violation of the rules and laid down procedures of the bank with the sole intent of not repaying the funds, thereby causing losses to the bank and generating corresponding gains for themselves.
Directorate of Enforcement (ED), Kolkata Zonal Office has arrested three persons, namely Kuldeep Rai Sharma, ExMember of Parliament, Andaman and Nicobar Islands & Ex-Chairman of Andaman and Nicobar State Cooperative Bank (ANSCBL); K. Murugan, Managing Director (ANSCBL); and K. Kalaivanan, Loan Officer (ANSCBL), under the provisions of the PMLA, 2002, in connection with a bank fraud case on 17.09.2025. The Hon’ble Special Court under (PMLA) has remanded Kuldeep Rai Sharma and K Kalaivanan to ED custody for a period of 8 days. These are the first ever arrests made by ED in the Union Territory of Andaman & Nicobar Islands.
Investigation conducted so far indicates that loan facilities were sanctioned through more than 100 loan accounts in the names of various firms and shell companies, in complete disregard of the laid-down procedures and guidelines of the bank and the amount involved in the fraud/NPA exceeds Rs. 500 Crore. Evidence collected so far also indicates that a loan amount of Rs. 230 crores (approx.) was fraudulently taken exclusively for the benefit of Kuldeep Rai Sharma and his associates including the Managing Director and Loan Officer.
ED investigation has also revealed that K Murugan, MD and K Kalaivanan, Loan Officer 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.
