A leaked US diplomatic cable has said the Ruias-led Essar Group, which has mining

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interests in Chhattisgarh, pays protection money to Maoists to safeguard its operations in the state, a claim dismissed as baseless by the conglomerate.

"A senior representative from Essar, a major industrial company with large mining and steel-related facilities in Chhattisgarh, told Congenoff (Consul General Office) that the company pays the Maoists 'a significant amount' not to harm or interfere with their operations," a cable dated January 11, 2010, originating from the US consulate in Mumbai and released by WikiLeaks stated.

"When the Maoists occasionally break this agreement and damage Essar property or threaten personnel, Essar sets different Maoist groups against each other to suppress the situation," it said.

The cable said the Maoists pose a real threat to development and security in the region and efforts to bring these areas back into the orbit of the government is warranted.

But, the Essar group in a statement denied the allegations as baseless.

"Essar is a law abiding corporate. We don't think it is appropriate or necessary to react to baseless and unfounded allegations," the company spokesperson said.

As the government prepared to initiate action against the Naxals in Chhattisgarh, the US consulate, based on the trip of its officials to the region, said that the potential for human rights abuses by the security forces in the state is high.