The Calcutta High Court on Tuesday rejected the bail applications of former Member of Parliament from Andaman and Nicobar Islands, Kuldeep Rai Sharma, and co-accused Sanjay Lal in connection with a ₹500 crore fraud at the Andaman and Nicobar State Cooperative Bank (ANSCBL). However, a single bench of Justice Apurba Sinha Ray granted bail to K Murugan, the bank’s former managing director, on medical grounds.
The bail applications were dismissed during the hearing of a criminal miscellaneous case, while the Enforcement Directorate (ED), which is probing the case under the Prevention of Money Laundering Act, 2002, opposed the release of the accused on the grounds of the gravity of the offence and ongoing investigation.
Sharma, who formerly served as chairman of ANSCBL, and Murugan were arrested on September 17, 2025. Sanjay Lal was arrested a month later. The arrests followed an FIR registered by the Crime and Economic Offences Cell of the Andaman & Nicobar Police on May 15, 2025, based on a complaint from the deputy registrar of cooperative societies highlighting widespread irregularities in loan disbursement.
The ED began its own investigation and conducted raids across the islands on July 31, 2025. According to findings shared by the agency, over ₹500 crore in loans were fraudulently sanctioned through more than 100 accounts opened in the names of shell companies and fictitious firms.
The ED alleged that Sharma and his close associates—including top officials of the bank—were the primary beneficiaries of the fraud. “Our investigation reveals that nearly ₹230 crore was siphoned off for the benefit of Kuldeep Rai Sharma and his associates, including the MD and loan officer of ANSCBL,” an ED official stated.
The fraudulent scheme, as per ED’s findings, involved sanctioning large loans without proper verification or collateral, using bogus companies, and channeling the funds for personal enrichment.
With the bail pleas of Sharma and Lal denied, they will remain in custody as the investigation progresses. The court’s decision to grant relief to Murugan was based solely on health considerations and does not reflect the merits of the case.
