Ramesh Kedia, owner of the Kedia Group that runs businesses ranging from food commodities to fabric, was injured Friday afternoon when three men attacked his car in Parwanipur in the industrial city of Birgunj in southern Nepal.

The attackers fired at the vehicle and threw a bomb at it, injuring Kedia, a doctor, and an employee also in the car, the local media reported.

Though initially the Maoist guerrillas, who have been extorting businessmen to fund their decade-old insurgency, were suspected, a local leader of the guerrillas issued an immediate denial, saying his banned party was not involved in the attack.

However, the Nepali media reported Sunday that a gang in Bihar, headed by Chhote Lal, had taken responsibility for the attack.

The gang called up journalists in Birgunj, saying Kedia was attacked for refusing to pay up Nepali Rs.5 million demanded by them.

The attack triggered fear and outrage among businessmen in Birgunj with the Industrial and Commerce Union business lobby giving a 48-hour ultimatum to the local administration to arrest the culprits, the Himalayan Times daily reported.

The attack on Kedia proves right the intelligence reports received by both the governments of Nepal and Bihar that taking advantage of the porous border between the two countries, gangs from Bihar and Uttar Pradesh have been carrying out kidnap and extortion of Nepali business men in the border areas and vice versa.

Indian gangs have also been using Nepali soil to keep victims of abduction hidden until the search for them in India died down or relatives or employers paid the ransom.

Last year, Nepali police raided a hideout in Birgunj and freed two Indians kidnapped by a gang from Uttar Pradesh.

Police also arrested three of the gang members, one of whom, identified as Sanjiv Mishra from Kushinagar in Uttar Pradesh, admitted he was also involved in the kidnapping of two senior Indian government officials in 2004.

P. Mandal, superintending engineer of India's National Hydroelectric Power Corporation, and K.K. Singh, chief engineer, had been abducted from Bihar after gunmen stopped their car on the highway. The kidnap hit headlines nationwide and a special task force was formed to obtain the officials' release. Subsequently, in a dramatic turn of events, Singh managed to give his captors the slip while Mandal was released later at the intervention of former Bihar chief minister Lalu Prasad.