Ruling Biju Janata Dal (BJD) legislator Prabhat Biswal was arrested by the CBI on Tuesday in connection with an allegedly dubious land deal with the kingpin of a Rs 500-crore chit fund scam in Odisha, investigating officials said.

The arrest of Biswal, a close confidante of chief minister Naveen Patnaik, could potentially give fresh ammunition to the BJP which is trying to topple the BJD in the 2019 assembly polls.

Officials said Biswal arrested from his Cuttack residence early Tuesday morning over the land deal with Seashore Group chief Prashant Dash, accused of swindling more than Rs 500 crore from people through a pyramid scheme.

Seashore Group

The Seashore Group,one of the 44 companies probed by CBI since May 2014 following a Supreme Court order.

Several other MLAs and MPs of the ruling party arrested earlier for their alleged involvement in other chit fund scams in the state.

The CBI arrested Banki MLA Pravat Tripathy in the Artha Tatwa chit fund scam, Mayurbhanj MP Ramachandra Hansdah and former Keonjhar MLA Subarna Naik in the Nava Diganta chit fund scam.

Besides them, Balasore MP Rabindra Jena, Dharmasala MLA Pranab Balabantaray, former minister Sanjay Das Burma are under the CBI scanner over their alleged involvement in several chit-fund scams.

In November 2014, CBI had interrogated Biswal and his wife, Laxmi Bilasini Biswal, over the land deal.

The MLA’s wife, a former zilla parishad president of Cuttack, had sold a plot of land to the Seashore chief for Rs 29.25 lakh in 2011. The Seashore chief paid for the land, but a few months later, he withdrew from the land deal and wanted his money back.

CBI Investigation

CBI sources said the Biswals never repaid the money to Seashore, but claimed to have signed an agreement paper about the re-payment. The agreement paper sent for forensic tests to validate the signature.

The BJP is highlighting the scams and alleged involvement of ruling party leaders to scale up its campaign against the “corrupt” Patnaik government. The BJD has hit back by protesting alleged anti-people policies of the BJP-led government at the Centre.

On Monday, the BJD called a five-hour hartal across the state protesting steep hike in fuel prices. The agitation turned violent with BJP workers clashing with BJP members. BJD workers vandalised the vehicle of a BJP leader in Bhubaneswar and tore posters of Prime Minister Narendra Modi and petroleum and natural gas minister Dharmendra Pradhan.

The Seashore Group, registered under the now defunct Orissa Self-Help Cooperatives Act and Multi State Cooperative Societies Act, allegedly helped by several prominent politicians and bureaucrats in the state including late Rajya Sabha MP Pyarimohan Mohapatra.

Owing to its political connections, the group even bid to become the banking correspondent of the State to act as the intermediary between banks and the poor for all welfare payments and cash transfers in Odisha.

Headed by Prashant Das, a former college lecturer from Mayurbhganj district, the group had at least 10 sister concerns and invested in a number of projects including hospitals, dairy, pharmaceuticals, travel agencies, retail outlets, media and credit cooperatives.

The group partnered with the Odisha government in healthcare, tourism and cooperative sector. Like the Saradha Group which ran a TV channel in Bengal, Seashore too started a TV channel — S-TV — offering huge salaries to young journalists. But it folded up within three years, leaving hundreds of its employees without jobs overnight.