"The allegations are malicious, fabricated and false. If necessary, we will take legal action," Patnaik told reporters on his return here after a five-day visit to Delhi.
To a question on whether the allegation was part of a conspiracy, he said it appears to be like that.
"There might be an attempt to malign the party's image," Patnaik said.
On BJD's victory in the recent Zilla Parishad polls, the chief minister said said BJP came third in the polls even though the saffron party's state unit president belonged to the area.
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Congress chief whip Tara Prasad Bahinipati has also demanded a CBI investigation into the financial transactions of the ruling BJD.
State BJP vice president Samir Mohanty said BJD is trying to divert people's attention by saying it will take legal steps on the matter.
Both BJP and Congress have stepped up their attack on BJD after Orissa High Court issued a notice to the Election Commission on a writ petition that sought direction to the poll panel for early completion of inquiry on alleged "false" statements made about Patnaik's election expenses during the 2014 Assembly polls.
He also alleged "discrepancies" in the sworn statements of expenses both by Patnaik and his party Biju Janata Dal, of which he is the president.
"We will draw the attention of ED and IT department and apprise them of the irregularities (of BJD's election expenditure)," BJP's Samir Mohanty had said yesterday.
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