The scam allegedly touched its peak in 2014-15 when about Rs 285 crore was transferred to the NGO.
The new government of Bihar that took charge last month after Nitish Kumar's party revived a partnership with BJP, ditching an alliance with Lalu Yadav and the Congress over corruption charges against the Yadav family, has encountered its first speed bump. Ironically, the bump is yet another corruption charge. In pictures being propagated by the newly-relegated opposition, a union minister and a senior leader of the BJP are shown with Manorama Devi, the founder of a non-profit that has found itself at the centre of a corruption scandal touching Rs 700 crore at the latest count.
Lalu Yadav has alleged that not just minister Giriraj Singh and Shahnawaz Hussain, but several BJP leaders had links with Manorama Devi. He also says that between 2005 and 2010 - when Mr Kumar ruled the state in a partnership with the BJP - government money was allegedly transferred to Manorama Devi's NGO, sometimes so brazenly that it was done merely on orders scribbled behind cheques. So far 10 people including three government bank officials and an assistant to the District Magistrate of Bhagalpur have been arrested.
Mr Hussain, a former lawmaker and BJP spokesperson, said he knew Manorama Devi, but had no idea about the wrongdoings.
According to the opposition, the Bhagalpur district administration illegally transferred government money to Manorama Devi's NGO called Srijan and she used it to play the stock markers and other investments for quick profits. When the money was needed for any government payments, it was transferred back. But this circle fell apart when she died last year and government's cheques for Rs 18 crore as compensation for land acquisition started to bounce.
The scam allegedly touched its peak in 2014-15 when about Rs 285 crore was transferred to the NGO.
Investigators have started to identify the alleged beneficiaries. The police have traced Rs 6 crore in the account of a local welfare official's wife, funnelled largely from the NGO.
While the opposition has demanded a CBI inquiry, a Chief Minister Nitish Kumar has not only set up a special investigation team but the chief secretary has asked all district heads to check if such a scam took place under their jurisdictions.