PARIS, March 28 (Reuters) - Shares in French care home company Orpea slumped on Monday after the French government said it planned to file a criminal complaint against it.

Orpea shares dropped by around 7 percent in early session trading, while shares in its rival Korian also fell by 3.1 percent.

Following a month and a half-long investigation into the group's management and financial practices, the government said it had found "significant dysfunctioning in the group's management, to the detriment of the care of its residents".

Orpea said that while the government report "does shed light on certain dysfunctions," it also "allows us to conclude that there is no organised 'system' that would lead to widespread abuse."

A book by independent journalist Victor Castanet in January made public claims of severe failings in hygiene care in an Orpea home for elderly people in a wealthy Paris suburb. The French group has repeatedly denied systemic shortcomings and said in its statement on Saturday that it denies "several particularly serious allegations" in the book.

The government is inspecting the country's 7,500 elderly care homes over the next two years and plans to reinforce legal and accounting rules to better regulate groups managing elderly care, with a view to better transparency over the use of public funds, it said. (Reporting by Sudip Kar-Gupta; Editing by Dominique Vidalon)