ED Arrests Ex-Andaman MP Kuldeep Rai Sharma In ₹500 Crore Money Laundering Case Linked To Bank 'Fraud' Case

(MENAFN- Live Mint) The Enforcement Directorate (ED) on Wednesday, September 17, arrested Congress leader Kuldeep Rai Sharma, 58, also a former Member of Parliament from Andaman and Nicobar Islands and two others in money laundering case linked to an alleged ₹500-crore cooperative bank fraud.

According to the ED statement, Sharma is a former chairman of the Andaman Nicobar State Cooperative Bank (ANSCB). K Murugan, the MD of the bank and K Kalaivanan, the bank's loan officer are other two arrested, it stated. The agency added a special Prevention of Money Laundering Act (PMLA) court in Kolkata has remanded Sharma and Kalaivanan to eight days of custody with the ED.

Officials stated that Murugan was not presented before the court as he had been admitted to a hospital.

The agency said the case involves an alleged fraud exceeding ₹500 crore, reportedly carried out by officials of the cooperative bank, including Sharma and others responsible for approving loan.

The ED stated,“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 procedures of the bank with the sole intent of not repaying the funds, thereby causing losses to the bank and generating corresponding gains for themselves.”

The money laundering case originates from an FIR filed by the Crime and Economic Offences Cell of the Andaman & Nicobar Police.

According to the ED, its investigation suggests that loans were approved through over 100 accounts opened under the names of various firms and shell companies, in "complete disregard" of the bank's established procedures and guidelines, with the total amount involved in the 'fraud' exceeding ₹500 crore.

₹230 crore loan 'fraudulently taken for benefit of Sharma and his associates'

"Evidence collected so far also indicates that a loan amount of ₹230 crore was fraudulently taken exclusively for the benefit of Sharma and his associates, including the Managing Director (Murugan) and Loan Officer (Kalaivanan)," it mentioned.

The agency accused Murugan and Kalaivanan of "fraudulently" securing loans from the bank using companies set up under the names of their relatives.

According to the allegations, they assisted their associates in obtaining multiple loans, receiving a 5 per cent commission for each, as directed by Sharma. The commission was allegedly collected either in "cash" or through associates via the bank accounts of shell companies.

The ED carried out searches during July and August, marking its first raids in a money laundering case in the Andaman Islands.

The Andaman Police arrested Sharma in July. Murugan and Kalaivanan were among those 8 individuals arrested in total.

(With inputs from PTI)

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