An SFIO investigation has been ordered by the Government into the management of former Global Trust Bank on charges of fund diversion and accounts manipulation. The bank was heavily involved in the Ketan Parekh headed share market scam of 2001.

According to information revealed by official sources, the Corporate Affairs ministry has "prima facie found evidence of fund diversion, serious financial irregularities and accounts manipulation by the management." The ministry had ordered the Registrar of Companies for a technical scrutiny of the books of the erstwhile bank last month.

"The Serious Fraud Investigation Office (SFIO) has been asked to submit its report on the enquiry into GTB within three months and six officers have been designated for the probe," according to a Corporate Affairs Ministry official.

The case of the bank goes back to year 2004 when the bank badly collapsed after unlimited lending to entities related to the Ketan Parekh scam.

The bank had started operations in the country in the year 1994. Ramesh Gelli was the CMD of the bank, while Sridhar Subasri served as executive director.

RBI's enquiry on the NPAs of the bank had revealed its real position of bad assets which had been camouflaged by making fresh loans to allied concerns including some of the front companies of Ketan Parekh.