Port Blair, Sep 26 (PTI) A local court in Port Blair on Friday remanded former Congress MP Kuldeep Rai Sharma and ex-loan officer of the Andaman and Nicobar State Cooperative Bank Ltd (ANSCBL), K Kalaivanan, to judicial custody in connection with the alleged Rs 500 crore loan scam.

The duo was arrested by the Enforcement Directorate (ED) on September 18 and taken to Kolkata for interrogation on eight days' remand.

K Murugan, the managing director of ANSCBL, was questioned in Port Blair on health grounds.

"We brought Sharma and Kalaivanan back to Port Blair from Kolkata as their ED custody ended today. They were produced before the court and all three accused, including Murugan, were remanded to judicial custody," a senior ED official told PTI.

Their arrest marks the first-ever action of its kind by the ED in the Union Territory of Andaman and Nicobar Islands.

The investigation stems from an FIR (on May 15, 2025) registered by the Crime and Economic Offences Cell, Andaman & Nicobar Police, against bank officials and private individuals.

On July 18, the Crime and Economic Offences Cell (Andaman Police) arrested Sharma (former chairman of the ANSCBL) in connection with the loan irregularities case.

The arrest was made following a complaint from the deputy registrar of the cooperative societies (HQ), who alleged gross irregularities in sanctioning loans to various people by the lender.

Later, ED also started a parallel investigation. On July 31, they conducted its first ever search operation at Andaman and Nicobar Islands.

In the last two weeks, they (ED) have summoned more than 10 people to Kolkata for examination.

ED’s probe has revealed a wide-ranging conspiracy in which loans worth over Rs 500 crore were sanctioned fraudulently through more than 100 accounts opened in the names of shell companies and firms.

According to ED findings, around Rs 230 crore was allegedly siphoned off for the exclusive benefit of Sharma and his close associates, including the MD and loan officer of ANSCBL. PTI SN SN MNB

Enforcement action in alleged bank loan fraud leads to arrests, parallel probes, searches and judicial remand. Enforcement authorities arrested a former cooperative bank chairman and an ex-loan officer in an alleged large-scale fraudulent loan scheme involving sanctioning loans to shell companies, diversion of funds to insiders, and subsequent judicial remand. The investigation began with a police FIR alleging irregular loan sanctions, followed by parallel inquiries and search operations by a federal enforcement agency, which has examined multiple witnesses and alleges systematic siphoning of bank funds through numerous accounts in the names of firms and shell companies.