The Enforcement Directorate has attached assets worth Rs 121.35 crore in connection with the Rs 500 crore Andaman and Nicobar State Co-operative Bank fraud case, with total attached assets now reaching approximately Rs 326.91 crore.

The Enforcement Directorate (ED) on Wednesday said it has attached 35 immovable properties and five movable properties worth Rs 121.35 crore in the Rs 500 crore Andaman and Nicobar State Co-operative Bank (ANSCBL) fraud case. The attached assets include land parcels, a hotel, two semi-submarine tourist vessels and bank balances lying in three bank accounts.

Investigation Overview

ED's Kolkata zonal office had issued the Provisional Attachment Order (PAO) on November 5 under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, attaching these 40 immovable and movable properties. ED investigation was initiated on the basis of a First Information Report (FIR) registered by the Crime and Economic Offences Police Station, Andaman and Nicobar Police, against former MP Kuldeep Rai Sharma and others.

ED said its investigation revealed that "Kuldeep Rai Sharma and the then Vice-Chairman of ANSCBL, along with bank officials and his associates, got large sums of loans sanctioned through shell companies in violation of banking rules." "The loan money was then diverted and never repaid," said the ED in a statement.

Modus Operandi of the Fraud

As per the federal agency, the accused floated 23 shell companies with no real business, using associates and other persons as dummy directors. "Loans of about Rs 301.50 crore were sanctioned to 21 of these companies, and loans of about Rs 271 crore in 18 of these companies have turned NPA (Non-Performing Asset). The loan money was taken out in cash or moved through several accounts and was used to buy land and other assets in the names of family members and associates," said the agency.

Besides these 23 shell companies, ED said, huge loans were illegally sanctioned to various other companies, including the companies belonging to the family members of Kuldeep Rai Sharma. "Such loans were also siphoned off and not repaid. The total proceeds of crime identified in this case exceed Rs 500 crore."

ED further mentioned that senior bank officials, including the Vice Chairman and Kuldeep Rai Sharma, MD K Murugan (since deceased), took a bribe of about 5 per cent of the loan amount. In many cases, ED stated, loans were sanctioned in excess, and a share of such sanctioned loans was taken in cash or through shell companies.

Asset Valuation and Forfeiture

During the investigation, ED found that most of the provisionally attached properties were either bought with the diverted loan money or pledged with the bank at highly inflated values to get the fraudulent loans. In many cases, it said, land bought for about Rs 1 crore was shown as worth Rs 10 crore or more in the loan files, with the help of a bank-empanelled valuer who assisted the accused persons in fraudulent loan sanctioning.

Out of the 35 immovable properties, ED pointed out, 15 properties were acquired through Powers of Attorney or sale agreements in the names of borrowers, accused persons and dummy directors. It also added that the lands were then mortgaged with ANSCBL to take loans far above their real value.

"The attached properties also include the land and building of Joye Grand Hotel and two semi-submarine tourist vessels imported from Croatia for about Rs 2.11 crore, registered in the name of Andaman Escapades Pvt Ltd. However, the investigation revealed that they were actually bought for Kuldeep Rai Sharma, using money from a fraudulent loan taken in the name of a shell company, Heyday Hospitality Services Pvt Ltd."

Legal Proceedings and Prosecution

Earlier, ED had arrested Kuldeep Rai Sharma (Vice-Chairman), K Murugan (MD, since deceased), K Kalaivanan (Loan Officer) and Sanjay Lal (Hotelier), and filed a Prosecution Complaint on November 14, 2025 before a Special PMLA court, Port Blair, against 39 accused persons and entities. Earlier, ED had also attached 51 properties worth Rs 205.56 crore on February 10 this year, and the attachment was confirmed by the Adjudicating Authority on August 4. With the present attachment order, the total value of properties attached in this case has gone up to about Rs 326.91 crore, added the ED.

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