Suspended Lok Janshakti Party leader Santosh Kumar Jha on Thursday brushed aside allegations that he had defalcated funds meant for flood-hit victims in Bihar.

"The allegations of defalcation of funds allotted for the flood-hit poor in Bihar last year are baseless and afterthoughts. The state government has to pay us around Rs ten crore more to clear the dues with respect to supply of sattu, food grains, candles, polythene sheets and match boxes in the flood-hit areas," Jha told PTI from Hajipur.

The Bihar government had allotted over Rs 17 crore for relief operations. The then district magistrate of Patna, Gautam Goswami, was made in charge of the whole operations and Bihar Small Scale Industries Corporation was made responsible for sourcing and distributing relief materials with the money allotted.

However, media reports said the money was credited to the account of Baba Satya [Images] Sai Industries, a company owned by Sanjeev Kumar, and not to the BSSIC.

Investigation by the Patna district administration revealed that Jha was the key figure responsible for the diversion. Jha has confirmed his association with Sanjeev Kumar.

He said the Bihar Small Scale Industries Corporation was entrusted with the task of managing relief materials 'on a six per cent commission basis, and the total supply of relief materials was mobilised by the Baba Satya Sai Industries in accordance with the agreement reached between BSSI and BSSIC'.

Jha, who recently joined the LJP, was suspended from the party after his involvement in the scam came to the fore.