Citing the audit report of the Comptroller and Auditor General (CAG) of India, which states that the MCD incurred losses to the tune of Rs 7.59 crore in the midday meal scheme, Kumar said that it corroborated their allegations. He further said that the report states that there was bungling of funds to the tune of Rs 5 crore in glucose biscuits bought from the same company.

He said that the midday meal scheme was started in the entire country for children enrolled in primary schools by the ministry of Human Resource Development in 1995. Under this scheme, the MCD was given wheat worth Rs 13.83 crore between November 1995 to March 1998 by the Food Corporation of India (FCI). However, Modern Food Industry paid only Rs 6.24 crore, which was half the original cost price of the wheat. In this deal, the MCD incurred a loss of Rs 7.59 crore. Moreover, on an average, the midday meal was provided to the school children on 58 per cent working days.

According to the CAG report, the MCD provided 1.02 kg of wheat to the Modern Food Industries for every loaf of bread weighing 800 gram, whereas the actual requirement is only 500 gram. Kumar said that the Standing Committee had only authorised the MCD to buy bread worth Rs 4.2 crore from Modern Food Industries. However the MCD had spent Rs 6.28 crore till March 1998 for this purpose without any sanction from the committee.

By September 1998, the civic body had spent Rs 9 crore in purchasing bread and that too without any authorisation. Kumar said that the report proved without any doubt that Municipal Commissioner V.K. Duggal and Additional Commissioner (Health) Rakesh Bihari had together executed a scam of crores of rupees. He said that now that the matter had come to light members of the Standing Committee would meet the Home Minister L.K. Advani to apprise him of the situation and appeal for the commissioner's removal. He said that they would table a proposal under section 54 of the DMC Act, wherein the central government can remove the commissioner from office if the resolution has been passed by a majority of the not less than three-fifths of the total number of members of the corporation.