ED conducts first-ever raids in Andaman Nicobar Islands in Rs 200 crore bank fraud case

In a first, the Enforcement Directorate (ED) on Wednesday carried out search operations in the Andaman and Nicobar Islands in connection with a multi-crore loan fraud involving the Andaman Nicobar State Cooperative Bank (ANSCB).

The raids, which marked ED’s maiden entry into the island territory, were carried out at nine locations in and around Port Blair and two premises in Kolkata, West Bengal.

According to a senior official, the searches are part of an ongoing money-laundering investigation based on a case registered by the Crime & Economic Offences Wing of the Andaman Nicobar Police.

During the course of the operation, ED sleuths recovered a host of incriminating documents that point to large-scale irregularities in the grant of loans and overdraft facilities by ANSCB. Officials said evidence gathered so far indicates that loan facilities were extended to several shell companies and firms by flouting the bank’s established norms and procedures.

According to ED, a group of around 15 shell entities was allegedly floated by suspects for the benefit of Kuldeep Rai Sharma, the former Member of Parliament from Andaman & Nicobar Islands, who is also the current Vice-Chairman of ANSCB. These entities fraudulently availed loans worth over Rs 200 crore from the cooperative bank, the officials said.

The probe agency claimed that a substantial portion of these funds were withdrawn in cash and subsequently siphoned off to Sharma and other beneficiaries.

ED sources said further investigation is under way to identify the full scope of the money-laundering network, trace the diverted funds, and determine the role of bank officials who may have colluded in the fraud.