Ex-Andaman MP among three held in bank loan fraud case

ED arrests former MP Kuldeep Rai Sharma and two others in a money laundering case involving a ₹500 crore fraud at the Andaman Nicobar State Cooperative Bank.

New Delhi: 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, agency said on Wednesday.

Ex-Andaman MP among three held in bank loan fraud case

Sharma is the former chairman of Andaman Nicobar State Cooperative Bank (ANSCB). He was taken into custody under the prevention of money laundering act along with K Murugan, the managing director of the bank, and K Kalaivanan, the bank’s loan officer.

“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.

The agency said it is the first ever arrest made by it in Andaman and Nicobar Islands in any PMLA case.

The ED probe stems 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 case pertains to the fraud committed by the officials of Andaman Nicobar State Cooperative Bank Ltd including Kuldeep Rai Sharma and others responsible for sanctioning bank 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 flagrant violation of the rules and laid down procedure of the bank with the sole intent of not repaying the funds, thereby causing losses to the bank and generating corresponding gains for themselves,” ED said.

“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 (non-performing assets) exceeds ₹500 crore,” it added.

The agency further said that it 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 added in its statement.

The agency carried out raids in the case on July 31 and August 1.

“The investigation has revealed that loan amounts were diverted and siphoned off through multiple shell entities and a substantial portion of these loans were withdrawn in cash and paid as share to senior bank officials, including Kuldeep Rai Sharma,” agency said.