Sri Vijayapuram, Dec 15 (IANS) A Special Prevention of Money Laundering Act (PMLA) Court in Sri Vijayapuram, the state capital of Andaman and Nicobar Islands, has dismissed the bail application of a former Member of Parliament (MP) and three others in a money laundering case linked to a Rs 500 crore fraud linked to the Andaman and Nicobar State Cooperative Bank (ANSCBL) and related shell companies, an ED official said on Monday.

The accused denied bail by the Special (PMLA) Court include Kuldeep Rai Sharma, former Andaman and Nicobar Islands MP and Ex-Chairman of ANSCBL; K. Murugan, Managing Director (ANSCBL); K. Kalaivanan, Loan Officer (ANSCBL); and Sanjay Lal (associate of Kuldeep Rai Sharma), the official said in a statement.

The Special Court in its order dated December 12, 2025, held that there are prima facie materials showing active involvement of all four accused persons in the money-laundering activities arising from the bank fraud and related shell companies.

Evidence collected so far indicates that bank loans were laundered through more than 100 loan accounts in the names of various firms and shell companies which has caused loss to the bank and the amount involved in the said fraud/NPA exceeds Rs 500 crore, the statement said.

While denying bail, the Court relied upon various statements recorded under Section 50 of the PMLA in its order and said that shell companies were created in connivance of the accused persons and bank funds were fraudulently disbursed and big amounts were routed as well as paid as bribe to Sharma and immovable properties were acquired.

The Special Court also said that the accused, namely Sharma and Sanjay Lal, destroyed evidence related to the fraud.

The Special Court also added that the arrest of the four accused was justified, thereby denying bail to all accused persons under Section 45 of the PMLA.

The Enforcement Directorate (ED) had arrested the accused under Section 19 of the PMLA, 2002, in connection with a bank fraud case involving amount more than Rs 500 crore.

The federal probe agency filed a prosecution complaint against 39 persons, including the arrested persons on November 14, 2025, before the Special Court under PMLA in Port Blair.

The ED initiated investigation in this case on the basis of an FIR registered by the Crime and Economic Offences Cell of the Andaman and Nicobar Police against Sharma and various other persons and officials of the bank.

The case pertains to a fraud committed by the above named persons, who were officials of ANSCBL and responsible for sanctioning bank loans in collusion with Sanjay Lal and Sanjeev Lal, the statement added.

These persons, in connivance with their accomplices, floated several shell companies and sanctioned large loans to them as well as to their regular entities with the sole intent of not repaying the funds, thereby causing losses to the bank and generating corresponding gains for themselves.

–IANS

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