The Enforcement Directorate has filed a prosecution complaint against 39 individuals and entities in connection with the alleged ₹500-crore Andaman & Nicobar State Cooperative Bank (ANSCB) fraud, marking one of the region’s most significant financial crime developments in recent years. The complaint, submitted on 14 November before the Special Court under the Prevention of Money Laundering Act (PMLA) in Sri Vijaya Puram, names former Member of Parliament and ex-chairman of the bank, Kuldeep Rai Sharma, along with Managing Director K Murugan, Loan Officer K Kalaivanan, and several private individuals including Sanjay Lal and Sanjeev Lal.
According to the ED, the case stems from an FIR filed by the Crime & Economic Offences Cell of the Andaman & Nicobar Police, which first flagged a pattern of alleged irregular lending, shell-company activity, and diversion of loan funds. Investigators say the fraud was orchestrated through more than 100 loan accounts created in the names of shell firms and beneficiary companies closely linked to bank officials and their associates. These loans, allegedly sanctioned with complete disregard for banking norms, were purportedly structured not to be repaid, resulting in massive losses for the cooperative bank.
The ED’s findings suggest that several large credit facilities were approved for entities floated by associates and relatives of senior officials. Proceeds from these loans were allegedly siphoned off, with portions withdrawn in cash and redistributed as commission, including to senior ANSCB officials. The agency states that a 5% commission was reportedly charged for facilitating multiple loans, acting on instructions attributed to the former MP. Officials claim the cash component often moved through shell firms to obscure the money trail.
During the probe, the ED arrested four key accused, Kuldeep, Murugan, Kalaivanan, and Sanjay Lal, under provisions of the PMLA. All four remain in judicial custody. Search operations conducted earlier at 21 premises in July-August and three more locations in September reportedly led to the identification of over 50 immovable properties suspected to be linked to proceeds of crime.
Investigators allege that the diverted funds travelled through a web of shell entities designed to conceal the origin and beneficiaries of the money. These findings, the ED says, strengthen the case for continued scrutiny, including tracing additional assets believed to be associated with the alleged fraud.
The agency has indicated that the financial trail is still unfolding, with efforts underway to identify further properties, cash flows, and potential beneficiaries. The prosecution complaint marks a major procedural step, but the broader investigation, spanning loan sanction patterns, asset trails, and alleged collusion, remains ongoing.
