A Gunma-based industrial waste disposal firm is suspected of dumping the toxic liquid that polluted part of the Kanto region's water system last week, the Saitama Prefectural Government said Friday.

When its officials conducted an on-site inspection last week at Dowa Hightech Co. in Hojo, Saitama Prefecture, they found it had hired a contractor from the city of Takasaki in Gunma Prefecture to process industrial waste. The company's name is being withheld by the prefectural government.

The contractor is suspected of discharging toxic fluids from the waste it processed into the Karasu River, including hexamethylenetetramine, created from ammonia and cancer-causing formaldehyde. The river runs through Gunma and merges with the Tone River — the main water source in Kanto — where formaldehyde levels spiked alarmingly last week in some areas.