ED arrests former MP in Rs 500-crore ANSCBL fraud; first PMLA case in UT

Port Blair, Andaman & Nicobar — September 18, 2025 A major development shook the Andaman & Nicobar Islands today when the Enforcement Directorate (ED) arrested Kuldeep Rai Sharma, former Member of Parliament and ex-chairman of the Andaman & Nicobar State Cooperative Bank (ANSCBL), in connection with a fraud case involving approximately ₹500 crore. Along with him, two other bank officials—K. Murugan, Managing Director of ANSCBL, and K. Kalaivanan, a loan officer—were also taken into custody as part of the investigation. According to sources, the alleged scam involved sanctioning large loans through shell companies, mis-use of bank protocols, and siphoning off funds in the names of associates. It is being described as the first ever arrest under the Prevention of Money Laundering Act (PMLA) in the Union Territory, marking a significant escalation in how financial crime is being pursued in these islands. The case came to light after an FIR was filed by the Andaman & Nicobar Police, prompting the ED to launch an investigation into possible laundering of illicit funds tied to cooperative bank operations. The suspects were presented before a special PMLA court, which remanded Sharma and Kalaivanan to ED custody for eight days; Murugan is reportedly hospitalized and hence was not produced in court immediately. Public reaction in Port Blair and elsewhere in the Islands has been mixed but largely demands strong action. Many residents say they have long suspected irregularities in the cooperative bank, but also complain that oversight has often lagged due to geographic remoteness and resource constraints. With today’s arrests, hopes are rising that systemic reforms might follow. Officials of the UT administration have stated that they are cooperating fully with the ED. There is also indication that the probe will look at all layers of the loan approval process, including auditing past years of bank leadership, checking records of loan repayments, collateral verification, and whether bank employees were complicit or negligent. The ED is expected to examine documents, bank ledgers, and possible overseas connections of shell companies. Political fallout is inevitable. Sharma is a senior Congress leader; his arrest is likely to stir debate in local political circles, both about accountability of elected representatives and about how cooperative banks are governed in Union Territories. Opposition parties are already demanding transparency in the investigation and stricter regulation of cooperative banks. Legal experts point out that this case may set precedents for how frauds in cooperative financial institutions are handled, especially in remote or island jurisdictions often overlooked in national financial crime narratives. It also raises questions about financial literacy, regulatory oversight, and institutional capacity in far-flung territories. For ordinary citizens, trust in banking institutions is at stake. Many small depositors and borrowers rely on ANSCBL for credit, agriculture financing, and cooperative services. The uncertainty may lead to calls for auditing, reform, and possibly tighter state/UT oversight by central authorities. In sum, the ED’s action today marks a watershed moment for financial crime enforcement in the Andaman & Nicobar Islands. The coming weeks will see investigations deepen, political debate intensify, and perhaps institutional restructuring if irregularities prove widespread.