Bhopal: A large diamond, thought to be worth as much as Rs 500 million ($7.47 million) has gone missing from Panna in the Madhya Pradesh district of India.

According to State minister and local MLA Kusum Mehedele, the “gooseberry-sized” stone should have been in the diamond office where it would have been properly valued before auction.

In a letter written to chief minister Shivraj Singh Chouhan, Mehedele is seeking an inquiry into the disappearance of the stone, reported the Times of India (TOI). In her letter, she alleges that often diamonds found in open pit mines in Panna are not deposited at office of diamond officer.

She said mine lease holder, Halkai Yadav, had connived with former diamond officer K P Dinkar in “illegally selling off the precious stone”. Some police officers are also involved, she alleged, reported the newspaper.

Chouhan has not responded in public to the claims but an aide in the chief minister’s office said an “informal probe” has been ordered.

Several residents of Panna echoed Mehedele’s concerns about leaseholders and their alleged collusion with sections of the administration.

According to The Telegraph, one resident, Rahul Singh, said he had found a diamond, believed to be 80 carats, which he handed over to the leaseholder, who then absconded with the stone.

The mines in Panna are facing possible closure as soon as the middle of next year due to their proximity to a tiger reserve. However, the National Mineral Development Corporation, which manages the mines, is hoping to extend their operation until 2020.