A Special Investigation Team has arrested seven people in connection with an alleged Rs 502-crore scam in Bihar’s Bhagalpur district. According to the FIR filed by the district administration, the government funds were meant for urban development projects, but had been embezzled into the accounts of a non-profit, NDTV reported on Sunday.

Preliminary investigation found that the money was meant to acquire land under the Mukhya Mantri Nagar Vikas Yojna, but was getting transferred to a non-profit called the Srijan Mahila Vikas Sahyog Samiti. The police said that the organisation used to organise training and employment programmes for women in different blocks in Bhagalpur. It also ran a cooperative bank and had applied to the Reserve Bank of India for a bank license.

Lalu Prasad calls for CBI inquiry

Rashtriya Janata Dal chief Lalu Pradsad Yadav has called for an inquiry by the Central Bureau of Investigation into the case, alleging that several Bharatiya Janata Party leaders had connections with the founder of the Srijan non-profit. Without providing proof, he claimed several BJP leaders, including Giriraj Singh and Shahnawaz Hussain, had links with Manorama Devi, who died in April, PTI reported.

“One cannot deny the money laundering aspect,” Yadav said. “There is the involvement of banks also, and hence, a state government agency is not capable of carrying out the probe in a fair manner.”

Hussain, however, said he knew Devi but had no knowledge of Devi’s crimes.

So far, five cases have been filed in the matter. A number of bank officials and office-bearers of the Srijan non-profit had been filed. The Bihar government has ordered all district magistrates to check on government funds deposited in banks, fearing such embezzlement in other districts.