Odisha police on Tuesday arrested Shravan Agrawal, a businessman dealing in explosives, on the suspicion that he was supplying explosives to Maoists and indulging in other illegal activities for financial gains.

The National Investigation Agency (NIA) and Odisha police have been interrogating Agrawal for the last two days.

Security officials suspected his involvement in supplying explosives to the Maoists after they found discrepancies in his statement about why the standard practices were not followed while transporting explosives. Police on Tuesday also launched raids at several explosive warehouses in Sundergarh and Keonjhar districts to verify the stock records of the explosive materials.

Last Tuesday, three trucks left the warehouse of Shravan under the jurisdiction of K. Balanga police station in Sundergarh for a stone quarry in the Banko area of the Sundergarh district, close to the Jharkhand border. The explosives, mostly gelatine sticks, are used in the mining area for blasting. But on the way, the Maoists looted one of the trucks and decamped with nearly four tonnes of explosives. During the interrogation, Agrawal allegedly misled investigators by claiming that the other two trucks had delivered the materials at the required site. Later, police recovered two mini-trucks loaded with explosive packets from the Balurghat area in Rourkela. This brought Shravan within the ambit of suspicion.

Police have appealed to the court for a four-day remand of Agrawal. They are inquiring into how the standard practices of the Petroleum and Explosives Safety Organisation (PESO) were not followed when the explosive-laden truck was going. It is also suspected that the loot was staged to mislead inquiries. Following the loot, Odisha Police, Jharkhand Police and special tactical units of the CRPF launched an extensive operation near the Odisha-Jharkhand border to recover the four tonnes of explosives "looted" by the ultras.

More than 70 per cent of the looted explosives, around three tonnes, were retrieved following a gunfight with Maoists in the Soranda forest near the Odisha-Jharkhand border. A jawan also sustained a grievous injury during the gunfight. Police recovered the "looted" explosives from Tiriliposh in Jharkhand, about 10km from the Odisha border. The Maoists used various means to conceal the stolen explosives and even buried some of the explosives to evade detection.

Police are yet to recover another 30 percent of the looted explosives.