Opposition leader Siddaramaiah (Cong) alleged that the Prerana Educational and Social Trust, run by B Y Raghavendra and BY Vijayendra and some others, had received Rs 27.18 crore donations during 2008-09 and 2009-10 and the donor firms had been granted favours by the government.
Intervening during submissions by Siddaramaiah when he sought to move an adjournment motion on the issue, Yeddyurappa said the government was ready for any inquiry, except by CBI.
"BJP-ruled states don't have confidence in the CBI," he said, a position which irked the Congress and the JDS with almost all opposition members on their feet demanding a CBI probe.
The treasury benches supported the chief minister's stand with full vigour, as sparks flew between them and the Opposition.
A combative Yeddyurappa said such trusts were being run by Opposition parties as well and said he was ready for a comprehensive discussion, also involving them, not just Prerana Trust.
Yeddyurappa also warned that if debate were to be held on the trusts run by some Opposition members, "they may have to run from the House (for cover as they will be exposed).
"We are ready for discussion," Siddaramaiah insisted, accepting Yeddyurappa's offer for a comprehensive debate.
Yeddyurappa said if it's proven that the Trust had misused funds, he would quit office, for which Siddaramaiah said it was not the point the opposition was raising.
Siddaramaiah said the donors were granted official favours and one of them, Adarsh Developers, was allowed to encroach government land.
While withholding consent to the adjournment motion, Speaker KG Bopaiah allowed discussion on the issue under a different rule.