Sri Vijaya Puram: At the centre of the Enforcement Directorate’s (ED) investigation into a suspected ₹200 crore loan fraud at the Andaman and Nicobar State Cooperative Bank (ANSCB) are a select group of local businessmen who, between them, have borrowed more than ₹50 crore from the institution. According to documents reviewed by The Wave Andaman, one of the key borrowers, who runs a construction company and is said to own a resort in Havelock among other places, figures prominently in the bank’s top debtor list and but has so far not been taken into custody by the local police, even as several former bank officials, including former chairman Kuldeep Rai Sharma, have already been arrested.
The ED, which conducted its first-ever raids in the Union Territory on 31 July, has now assumed a central role in the case. The agency carried out coordinated searches at multiple premises in Sri Vijaya Puram and Kolkata under the Prevention of Money Laundering Act (PMLA), seeking evidence of fund diversion, shell entities, and unaccounted transactions.
The Enforcement Directorate is a central agency under the Ministry of Finance empowered to investigate offences related to money laundering, foreign exchange violations, and financial crimes with cross-jurisdictional or international links. Its powers derive from statutes such as the PMLA, the Foreign Exchange Management Act (FEMA), and the Fugitive Economic Offenders Act. It can conduct searches, seize assets, attach properties, and prosecute individuals involved in the laundering of proceeds of crime. ED typically steps in when financial irregularities appear to be part of a wider criminal conspiracy involving multiple entities or when scheduled offences under the PMLA are triggered.
While the Crime and Economic Offences Wing of the UT police had initiated the probe earlier this year and made initial arrests, the ED’s involvement has significantly widened the scope and momentum of the investigation.
Sources told The Wave Andaman that several loan accounts under scrutiny have turned into non-performing assets (NPAs), raising red flags about borrower intent and internal controls within ANSCB. Investigators are now examining whether the funds were misused for asset creation or layered through proxy firms.
While a junior employee of the aforesaid firm was arrested during the early phase of the local investigation, the primary proprietor of the business remains under official scrutiny but has not yet been detained. Local police officials declined to comment on the status of the investigation or the timeline of further action.
During the searches, ED teams reportedly recovered internal bank records, property documents, and digital data pointing to a web of transactions. Investigators believe that a section of the loan approvals may have been facilitated through internal collusion, an angle that both central and local agencies are continuing to examine.
The original FIR filed by the police had flagged a pattern of large, unsecured overdrafts, lack of proper borrower verification, and repeated disbursal of funds to entities with limited financial standing. With ED stepping in, the investigation has shifted from a banking fraud case to a potential money laundering probe with national implications.
“This is not merely about default. We’re looking at systemic misuse of cooperative credit and structured diversion of funds,” a senior official familiar with the matter told The Wave Andaman.
The agency is expected to initiate further action in the coming weeks, including possible summons, asset attachments, and financial tracing of associated accounts. With enforcement attention intensifying, the case is now shaping up as one of the biggest financial crime investigations the islands have seen in recent years.
The Wave Andaman will continue to follow developments as they unfold.
