A Special Enforcement Directorate (ED) Court has rejected the bail applications of four key accused in the Andaman & Nicobar State Cooperative Bank (ANSCB) case, keeping them in judicial custody in a high-profile money laundering probe linked to the alleged diversion of cooperative bank funds.
The court denied bail to former Member of Parliament Kuldeep Rai Sharma, businessman Sanjay Lal, former ANSCB Managing Director K. Murugan, and Kallai Varan, a bank employee of the cooperative lender, people aware of the proceedings said.
The four are facing prosecution under the Prevention of Money Laundering Act (PMLA) in connection with alleged large-scale financial irregularities at ANSCB, including irregular loan disbursals and diversion of public funds through a network of borrowers and intermediaries.
The Enforcement Directorate, which arrested all four accused during the course of the investigation, opposed the bail pleas, citing the gravity of the offences, the scale of the alleged fraud and the risk of interference with the ongoing probe. All four remain in judicial custody.
The ANSCB case stems from investigations by the ED and the Crime Investigation Department (CID) of the Andaman & Nicobar Police into alleged misappropriation of bank funds running into several hundred crore rupees. The ED’s prosecution complaint alleges that lending norms were systematically bypassed to extend loans to favoured entities, with the proceeds subsequently laundered through layered transactions.
Investigators have projected former MP Kuldeep Rai Sharma and businessman Sanjay Lal as central figures in the alleged conspiracy. K. Murugan, who served as Managing Director of the cooperative bank, is accused of enabling irregular lending practices, while Kallai Varan, an ANSCB employee, has been named for his alleged role in facilitating transactions that are under scrutiny.
Search operations conducted at 21 premises in July and August, followed by searches at three additional locations in September, led to the identification of over 50 immovable properties suspected to be linked to the proceeds of crime, officials said. The ED has alleged that the diverted funds moved through a web of shell entities to conceal their origin and beneficiaries.
As reported earlier by The Wave Andaman, enforcement agencies have frozen more than 130 bank accounts linked to the accused and associated entities. Investigators have noted that the cash balances seized so far are modest compared with the alleged scale of the fraud, indicating extensive fund diversion and asset creation beyond easily traceable banking channels.
The ED has said the findings from searches and financial trail analysis strengthen the case for continued scrutiny, including further tracing and attachment of assets. Officials indicated that supplementary filings cannot be ruled out as the investigation progresses.
