ED Freezes Assets Worth ₹121.35 Crore in Andaman Bank Scam Investigation

Port Blair, November 11 (Daily Kiran) : The Enforcement Directorate (ED) has taken significant action in the Andaman and Nicobar State Cooperative Bank Limited (ANSCBL) scam by temporarily freezing assets valued at ₹121.35 crore. This includes 35 immovable properties and five movable assets, such as land parcels, a hotel, two semi-submarine tourist vessels, and funds in three bank accounts.

The temporary freeze order was issued on November 5, 2026, under the Prevention of Money Laundering Act (PMLA), 2002. This measure is part of the ongoing investigation into a bank loan scam involving former MP and ANSCBL’s ex-vice chairman, Kuldeep Rai Sharma, along with other accused parties.

Investigators discovered that Sharma, bank officials, and their associates bypassed banking regulations to approve substantial loans through shell companies. Allegedly, these funds were transferred elsewhere and never repaid.

According to the ED, the accused established 23 shell companies without any legitimate business operations. Dummy directors were appointed among close associates and others. Of these, 21 companies received loans totaling approximately ₹301.50 crore, while 18 companies have since become non-performing assets (NPAs) with debts amounting to around ₹271 crore.

The investigation revealed that property values were artificially inflated to secure loans from the bank. In some instances, land valued at ₹1 crore was falsely presented as worth ₹10 crore or more in loan documentation.

The ED claims that a panel evaluator from the bank facilitated these fraudulent valuations, enabling the approval of large-scale loans. Of the 35 frozen properties, 15 were acquired through power of attorney and sale agreements in the names of the accused, borrowers, and dummy directors. These properties were then mortgaged to the bank for loans exceeding their actual worth.

The ED has also frozen the land and building of Joy Grand Hotel, along with two semi-submarine tourist vessels imported from Croatia for approximately ₹2.11 crore, registered under Andaman Escapades Private Limited. However, the investigation revealed that these assets were actually purchased for Sharma, allegedly using fraudulent loans taken out in the name of shell company M/S Hede Hospitality Services Private Limited.

Further findings indicated that senior bank officials, including Sharma and the late former managing director K. Murugan, allegedly received about 5% of the loan amounts as commission in exchange for loan approvals. In many cases, loans were sanctioned beyond actual needs, with portions of the funds being returned in cash or through shell companies.

The ED has already arrested Sharma, former managing director K. Murugan, loan officer K. Kalaiwanan, and hotelier Sanjay Lal. On November 14, 2025, the agency filed prosecution complaints against 39 accused individuals and entities.

Previously, on February 10, 2026, the ED had frozen 51 assets valued at ₹205.56 crore, which was confirmed by an adjudicating authority on August 4, 2026. Following the latest actions, the total value of frozen assets in this case has now reached ₹326.91 crore. The ED stated that the investigation is ongoing, and further actions may follow.