The Enforcement Directorate has filed a supplementary prosecution complaint in the alleged large-scale loan fraud and money laundering case involving the Andaman and Nicobar State Cooperative Bank Limited. The complaint, filed on 6 November 2026 before the Special Court under the Prevention of Money Laundering Act in Port Blair, names former Member of Parliament Kuldeep Rai Sharma and 13 additional persons and entities. This brings the total number of accused in the case to 52.
According to the ED’s press release dated 11 November 2026, the investigation has identified proceeds of crime exceeding Rs 500 crore. Properties worth approximately Rs 326.91 crore have been attached in connection with the case. The probe is being handled by the Kolkata Zonal Office-II of the Enforcement Directorate and stems from an FIR registered by the Crime and Economic Offences Police Station of the Andaman and Nicobar Police.
The central allegation is that certain bank officials, acting in collusion with private individuals and companies, facilitated the sanction and disbursement of loans in violation of the bank’s rules. The ED says 23 shell companies were floated as part of the alleged arrangement. Of these, 21 companies received loans worth approximately Rs 301.50 crore. A substantial portion of these loans, about Rs 271 crore, later turned into non-performing assets.
The agency further states that the arrangement was not limited to shell companies. Several operational businesses also received loans in exchange for commissions of approximately 5 per cent of the sanctioned loan amount. These commissions were allegedly paid to Kuldeep Rai Sharma and senior bank officials.
The ED has described how the alleged fraud was carried out. Shell companies were created in the names of associates or dummy directors. These companies received large loans within a few months of incorporation despite having little or no genuine business activity. Bank officials responsible for processing and approving loan applications allegedly facilitated the sanctions using incomplete documentation and inflated property valuations.
One key allegation concerns the valuation of land offered as security. The ED says relatively inexpensive land parcels were pledged after their values had been inflated many times. The same land parcels were allegedly used repeatedly as mortgage security to raise additional loans. An empanelled property valuer of the bank, J. Suresh Chandran, has been named among the newly arraigned accused.
After the loans were disbursed, the money was quickly withdrawn in cash or transferred through several bank accounts belonging to shell companies and associates, according to the ED. The funds were not used for the purposes stated in the loan applications. Instead, the diverted money was used to purchase land, construct hotels and resorts, acquire semi-submarine tourist vessels, repay old loans, and acquire properties in the names of family members and associates.
Numerous land parcels were acquired through powers of attorney and sale agreements rather than registered sale deeds. These properties were later offered as security for further loans from the same bank, many of which also became non-performing assets.
The ED states that Kuldeep Rai Sharma and his wife, Vinita Sharma, benefited from fraudulent loans amounting to approximately Rs 81.10 crore.
These loans were obtained through companies linked to Sharma and in the name of his wife. Sharma, a former Member of Parliament from the Andaman and Nicobar Islands, had also served as Vice-Chairman of the cooperative bank.
The agency had earlier arrested Sharma on 17 September 2025 under the Prevention of Money Laundering Act, along with K. Murugan, the then Managing Director of the bank, and K. Kalaivanan, a loan officer. Hotelier Sanjay Lal was arrested later in the investigation. Murugan has since passed away.
In the second provisional attachment order dated 5 November 2026, the ED attached 35 immovable properties and five movable properties worth approximately Rs 121.35 crore. These include the land and building of Joye Grand Hotel, two semi-submarine tourist vessels, and bank balances in three accounts. The vessels were registered in the name of Andaman Escapades Private Limited and had a reported acquisition cost of about Rs 2.11 crore. The ED alleges they were purchased for Kuldeep Rai Sharma using funds from a fraudulent loan obtained in the name of Heyday Hospitality Services Private Limited.
Fifteen of the 35 immovable properties attached under this order were acquired through powers of attorney or sale agreements and were held in the names of borrowers, accused persons and dummy directors. These properties were later mortgaged with the bank to obtain loans substantially exceeding their actual value, according to the agency.
An earlier provisional attachment order issued on 10 February 2026 had covered properties worth approximately Rs 205.56 crore. That attachment was confirmed by the Adjudicating Authority on 4 August 2026. Together, the two orders bring the total value of attached properties to about Rs 326.91 crore.
The money-laundering investigation is based on FIR No. 14 of 2025, registered on 15 May 2025 by the Andaman and Nicobar Police. The FIR invoked sections of the Indian Penal Code relating to criminal breach of trust, cheating, forgery and criminal conspiracy. The ED registered its Enforcement Case Information Report on 15 July 2025. Searches were conducted on 31 July and 1 August 2025 at 21 premises.
The ED filed its first prosecution complaint on 14 November 2025 against 39 persons and entities. The supplementary complaint of 6 November 2026 added 13 more accused, raising the total to 52. The newly named individuals include Jayanta Bala, J. Suresh Chandran, John Robert Babu, Anil Kumar, Md. Ali, P. Abhilash and Kiran Lal N. H., along with associated companies.
In February 2026, the Calcutta High Court’s Circuit Bench at Port Blair rejected Kuldeep Rai Sharma’s bail application. The court noted the seriousness of the allegations, the material presented by the ED, and the restrictions under Section 45 of the Prevention of Money Laundering Act. The court also observed that Sharma’s father had served as Chairman of the bank during the relevant period while Sharma was Vice-Chairman, which could have given him an opportunity to influence the bank’s managing committee.
The ED’s investigation has identified more than 100 loan accounts through which loans were allegedly sanctioned in the names of different firms and shell companies. The agency maintains that the total proceeds of crime exceed Rs 500 crore. Of the Rs 301.50 crore lent to the 21 shell companies, about Rs 271 crore, or nearly 90 per cent, became non-performing assets.
The case remains under investigation and is pending before the Special Court under the Prevention of Money Laundering Act in Port Blair. The allegations described are those made by the Enforcement Directorate in its prosecution complaints and press releases. These represent the investigating agency’s case and are yet to be tested in court.
