By Amarnath Tewary
BBC News, Patna
An inquiry has been launched in India into the alleged diversion of funds by a former civil servant who made the list of Time magazine's Asian heroes.
Mr Goswami says there is no scam (photo by Prashant Ravi)
Time said Gautam Goswami, who denies any wrongdoing, was a "bureaucrat [who] saves India's flood victims".
He is being probed for allegedly diverting funds for flood victims in Bihar state, a senior official said.
About 1,000 people died and millions were left homeless in monsoon floods in Bihar last year.
Mr Goswami was the top bureaucrat in Patna, Bihar's capital, during the floods.
He told the Indian Express newspaper: "There is no scam. The whole exercise was transparent. I don't know why people are dragging my name into this. What I think is people are simply jealous of me."
Mr Goswami joined a list of leading personalities from Asia in last year's Time magazine's Asian Heroes list, which also included Bollywood star Shah Rukh Khan and sitar player Anoushka Shankar.
Mr Goswami quit his job and joined a private company in January this year.
Bihar is now under direct federal rule after elections in March failed to throw up a clear winner.
The district administration is investigating whether Mr Goswami diverted government funds meant for other purposes into flood relief work.
There were complaints from the people over relief distribution
"Reports suggest that funds meant for acquisition of land for railways was diverted to the flood relief work and it has definitely put a question mark over the whole exercise," Bihar chief secretary KAH Subramaniun told the BBC.
Officials say they are investigating whether an amount of more than $4m was diverted to flood relief work and misappropriated.
State governor, Buta Singh, who is now running the affairs of the state, said that if the local investigation did "not come up to expectations in carrying out a thorough and impartial probe," India's top investigation agency, the Central Bureau of Investigation (CBI), would be entrusted with the probe.
"We will not tolerate any attempt to cover up alleged swindling of government funds," he said.
The Indian Express newspaper has reported that some of the funds meant for flood victims ended up with a private company and not an authorised government agency which was providing relief.
There were complaints about distribution of flood relief material by the administration in Bihar last year.
At least five people were killed after the police opened fire on protesters complaining about the distribution.