Lalu Yadav has demanded a CBI investigation into the Bhagalpur treasury scam.

Highlights Government funds allegedly siphoned off into the accounts of a non-profit

Seven persons arrested so far in the case being probed by investigators

Lalu Yadav alleges BJP links in the case, demands investigation by CBI

A scam to the tune of 502 crore has come to light in Bihar, in which government funds for urban development has been siphoned off into the accounts of a non-profit. Seven persons have been arrested so far in the case, which is being investigated by a Special Investigation Team. Lalu Yadav, till recently the alliance partner of Chief minister Nitish Kumar, has demanded an investigation by the Central Bureau of Investigation, alleging that several BJP leaders had links with the founder of the non-profit.A preliminary inquiry has revealed that money allocated for land acquisition under the Mukhya Mantri Nagar Vikas Yojna -- which was being deposited in nationalised banks -- was getting transferred to a non-profit called Srijan Mahila Vikas Sahyog Samiti. Most of the funds which was embezzled were meant for land acquisition, according to an FIR filed by the district administration.The non-profit, based in north Bihar's Bhagalpur district, used to organise training programmes for women in different blocks of Bhagalpur. It also organised employment programmes for women.The police said the non-profit was running a co-operative bank and had also applied for a bank license from the Reserve Bank of India.Lalu Yadav has alleged that several BJP leaders, including Shahnawaz Hussain and Giriraj Singh, had links with Manorama Devi, the founder of the NGO, who died in April. Photographs of the two leaders with Manorama Devi have surfaced. The RJD leader did not furnish any documents to support his claim."One cannot deny the money laundering aspect. 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," Mr Yadav was quoted as saying by news agency Press Trust of India.

Mr Hussain, a former lawmaker and BJP spokesman said he knew Manorama Devi, but had no idea about the wrongdoings.So far, five cases have been filed, that name several bank officials and office bearers of the non-profit. More cases can be filed later, officials have said. Apprehensive that a similar siphoning is happening in other districts, the state government has ordered all district magistrates to check on government money parked in banks.