Bihar Chief Minister Nitish Kumar on Thursday recommended a Central Bureau of Investigation inquiry into an alleged scam in which government funds to the tune of Rs 502 crore were siphoned off by a non-profit organisation in Bhagalpur, PTI reported. Some nationalised banks and government officials were also allegedly involved in the scam.

Kumar announced his decision after a high-level meeting to discuss the case. “The CM gave an order to hand over cases registered in the matter to the CBI for inquiry,” an official statement said. The meeting was attended by Bihar Chief Secretary AK Singh, Director General of Police PK Thakur, Principal Secretary (Home) Amir Subhani and Inspector General of Police (economic offence unit) GS Gangwar.

The alleged swindling began in 2006. On Monday, a preliminary investigation had found that the money was meant to acquire land under the Mukhya Mantri Nagar Vikas Yojna, but was transferred under different names to the accounts of Bhagalpur-based cooperative society Srijan Mahila Vikas Sahyog Samiti Limited.

The money was transferred to Bank of Baroda and Indian Bank, where the government, too, had accounts. The process continued till the death of Srijan founder-secretary Manorama Devi in February this year.

The matter came to light in March, reported The Indian Express. The police had 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 license.

On Monday, Rashtriya Janata Dal chief Lalu Pradsad Yadav had also called for an CBI inquiry into the case, and alleged that several Bharatiya Janata Party leaders had connections with the founder of Srijan. He, however, did not provide any proof.

So far, five cases have been filed in the matter, and a Special Investigation Team has arrested seven people. The Bihar government has ordered all district magistrates to check on government funds deposited in banks, fearing such embezzlement in other districts.