What is the Rs 880 crore Srijan scam roiling Bihar and why it’s important: 10 points

The fresh crisis comes days after the chief minister Nitish Kumar switched allies, and dumped the RJD and Grand Alliance in favour of BJP
Police team at Srijan Mahila Sahyog Samiti office. HT File Photo
Police team at Srijan Mahila Sahyog Samiti office. HT File Photo
Updated on Aug 24, 2017 03:07 PM IST
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Hindustan Times, Patna | By

A Rs 880 crore corruption scandal has engulfed Bihar and plunged its government in crisis. Chief minister Nitish Kumar and his new ally, the BJP, is fighting charges from the opposition Rashtriya Janata Dal (RJD).

The fresh political turmoil roiling the state comes just days after the chief minister switched allies, and dumped the RJD and Grand Alliance in favour of the saffron party.

But what exactly is the Srijan scandal that is dominating headlines and has disrupted the ongoing assembly session. Hindustan Times brings you an explainer:

What is the Srijan scam: The Srijan Mahila Sahyog Samiti is an NGO, in whose accounts large amount of government funds were allegedly fraudulently transferred between 2004 and 2014. , The offices of the organization is located in Sabour block of Bihar’s Bhagalpur district.

What did the NGO do: The NGO used to provide vocational training to women in Bhagalpur. The NGO is accused of pilfering government funds from the Bhagalpur district administration’s accounts for various welfare schemes in connivance with district officials, bankers and its staff.

How did the scam go unnoticed for so long: In connivance with bankers and district officials, the NGO would allegedly get fake bank statement and passbooks, mentioning in them the correct amount for the purpose of maintaining official books of account in different government departments.

How was the scam carried out: Investigators say the NGO used to fraudulently procure cheque books from banks and forge signature of the district magistrate to issue cheques in its favour, transferring huge funds.

NGO’s modus operandi: When the heads of government departments, including the district magistrate, used to issue cheques for withdrawal of money, government staff and bankers would allegedly relay the information to the NGO, which would then reportedly replenish the money in said government account.

How did the scam come to light: After the death of NGO founder Manorama Devi in February 2017, differences cropped up in the family, and people who had taken loan illegally from the NGO began to default in payment. The NGO began feeling the financial pinch and had difficulties in timely replenishment of government money. On August 3, 2017 a government cheque of Rs 10.32 crore bounced due to insufficient funds in the account, leading to the unravelling of the scandal.

What is its present status: The economic offence unit of the Bihar police is assisting the Bhagalpur police. Thirteen FIRs, including one each in adjoining districts of Banka and Saharsa, have so far been lodged. The special investigation team of the Bhagalpur police has so far arrested 18 persons in this connection. The scam is estimated to have crossed Rs 880 crore.

Why Lalu Prasad is gunning for Nitish Kumar: The Rashtriya Janata Dal (RJD) has been on the offensive ever since chief minister Nitish Kumar brought the Srijan scandal to public domain at the Earth Day function in Patna on August 9. By then three FIRs had already been registered in Bhagalpur.

RJD chief Lalu Prasad, already smarting under protest after the JD(U) broke away from the RJD-led Grand Alliance, sees it as an opportunity to get even with Kumar. At the same time, he is also using Srijan as a stick to beat BJP leader Sushil Kumar Modi with. Modi has, of late, made a slew of exposes against Prasad for amassing property disproportionate to his known source of income.

What Lalu and RJD are doing: Lalu’s family is under pressure after the income tax and enforcement directorate tightened its noose around them. The ED has issued notices to Misa and her husband Shailesh. The CBI had also raided Prasad’s premises early last month in the alleged land-for-hotel scandal during his tenure as the railway minister (2004-09).

Lalu now sees the Srijan scandal as a God-send opportunity to turn the tables on the NDA because it was the NDA which was in power for a major part of the scam period (2004-13). Lalu even released photographs of the BJP minister Giriraj Singh, Shahnawaz Hussain, Sushil Kumar Modi and Godda MP Nishikant Dubey with NGO founder the late Manorama Devi.

Lalu Prasad has dared the Prime Minister to take action against deputy chief minister Sushil Kumar Modi, who was the finance minister of Bihar (2005-2013). Lalu even alleged that the fodder scam, in which he has been convicted, was ‘peanuts’ given the magnitude of the government fund transfer scam, which, he said, ran into thousands of crores of rupees.

What the NDA and Nitish Kumar are saying: The NDA has maintained that the scam broke out in 2004 when the RJD was in power. Chief minister Nitish Kumar has tried to come clean of the Srijan scandal by recommending a CBI probe on August 17. The CBI has taken up the case. Bihar chief secretary Anjani Kumar Singh has now asked all district magistrates to get their accounts checked thoroughly, raising doubts that the government was also caught napping, even as it was the government, which eventually detected the scam.


    Ruchir writes on health, aviation, power and myriad other issues. An ex-TOI, he has worked both on Desk and in reporting. He over 25 years of broadcast and print journalism experience in Assam, Jharkhand & Bihar.

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