For 1st time, ED enters Port Blairon bank scam trail

NEW DELHI: In its first-ever enforcement action in Andaman & Nicobar Islands, the ED on Thursday conducted searches at nine locations in Port Blair and two in Kolkata in a money laundering case against a former Congress MP from the island and officials of the Andaman Nicobar State Cooperative (ANSC) Bank for alleged fraud of over Rs 200 crore.

Former MP Kuldeep Rai Sharma, who was arrested by the Island police on July 18, is the prime accused in the case for alleged misappropriation of bank funds by issuing loans to shell entities and laundering the proceeds. Sharma is the vice-chairman of ANSC Bank.

The police FIR too has alleged large-scale irregularities in grant of loans and overdraft facilities by ANSC Bank. At least eight persons have been arrested in the case, including Sharma and other bank officials, by the local police.

On July 29, a special court granted the police Sharma's custody for further interrogation. The ED may seek his custody after the police investigation to identify properties purchased using the "proceeds of crime" and attach them.

"Evidence collected so far indicates that loan facilities were extended to various shell companies/firms, with 15 of them created by suspects for the benefit of Kuldeep Rai Sharma, a former MP of Andaman & Nicobar Islands," a source alleged.

The agency has found that loans of more than Rs 200 crore were fraudulently taken by these entities from ANSC Bank.

"A substantial portion of these loans was withdrawn in cash and paid to the beneficiaries, including Kuldeep Rai Sharma," sources said.