Jammu, March 21 (IANS) Some traders doing business across the Line of Control (LoC) are diverting money to fund separatists in Jammu and Kashmir, the government has said.

The disclosure was made by Industries and Commerce Minister S.S. Salathia in a written reply to Bharatiya Janata Party (BJP) legislator Ashok Khajuria in the assembly Saturday.

The statement said: 'It is a fact that some persons in the garb of cross-LoC trade have been found indulging in providing help to militants for fomenting trouble in the state.'

He said some traders were diverting money to activists of militant outfits including the Lashkar-e-Taiba. He accused one company of money laundering.

'An amount of Rs.13,85,000 has been distributed among the workers of Lashkar-e-Taiba to spread terror activities in the (Kashmir) Valley,' the minister said, citing investigation by police.

Salathia said a case had been registered.

Cross-LoC trade started in October 2008 following protests by traders in the valley who sought trade between Jammu and Kashmir and Pakistani Kashmir.