Five children were rescued and more than 500 farmers in Madhya Pradesh suffered crop losses on Wednesday after a mud wall of a fly-ash dyke of Essar Energy’s thermal power plant in Singrauli district collapsed during heavy rain, The Times of India reported on Friday. Essar Power MP Ltd in a statement on Thursday alleged the breach in the ash pond was “a clear case of sabotage”.

The fly-ash dyke reportedly turned into a mudslide and hit Khairahi and Karsualal villages around 10 pm. The children were sleeping when the fly-ash slurry flooded their homes.

“Initial investigations reveal that there was negligence on the part of the power company,” Singrauli District Collector KVS Chaudhary told The Times of India. “The spill has damaged crops and soil. It’s also seeping into the river.” He said the water resources department had formed a committee to analyse the incident.

“Children were rescued well in time,” Chaudhary added. “We have put 20 patwaris on the task to ascertain crop loss.”

The company, meanwhile, said families continued to live on the non-agricultural land it owns beside the ash pond “at their own risk as encroachers despite repeated requests from EPMPL”.

“Our security personnel deployed at the location have given a statement to the local police saying that they spotted four to five unidentified persons fleeing from the site of the incident last night,” it claimed. “We have filed an application for FIR alleging sabotage, and also apprised all local authorities about the incident.”

Fly ash contains harmful metals such as mercury, arsenic and lead that can cause direct harm to humans and the environment.

According to government and pollution control norms, ash ponds are supposed to be reinforced with concrete walls and should not used beyond their capacity. The artificial ponds store ash, which is the byproduct of coal-fired power plants.

“In some areas, the ash has gone up to six feet,” activist Jagat Narayan Vishwakarma told NDTV. “Two villages are affected. The breach happened in a wall of the ash pond. These walls should be built of mud and bricks and concrete, but in this case the wall was built with ash.” He added that this had happened in other power plants in the area earlier, but no one seemed to care.

In 2013, the state Pollution Control Board had reported that leakage of fly ash was flowing into streams.