CHENNAI: The Enforcement Directorate (ED) on Monday was carrying out searches at seven locations across Chennai, including the residence of S. Ranganathan, owner of Sresan Pharmaceuticals, and offices of senior officials from the Tamil Nadu Drug Control Department, as part of a money laundering probe under the Prevention of Money Laundering Act (PMLA).
The searches come days after a major breakthrough in the Madhya Pradesh cough syrup tragedy, in which at least 22 children in Chhindwara district died after consuming the company’s Coldrif cough syrup.
The company’s owner, Ranganathan Govindan, was arrested last week and sent to a 10-day police custody in connection with the case.
The ‘Coldrif’ cough syrup was found to be “dangerously” adulterated with diethylene glycol (DEG), a highly poisonous substance. An investigation reportedly revealed over 350 violations at the company’s Tamil Nadu plant, including 38 serious ones.
The latest raids are aimed at uncovering possible financial irregularities, fund diversions, and regulatory collusion between Sresan Pharmaceuticals and state drug control officials.
Sources said the ED is also examining whether illegal proceeds were laundered through shell companies and benami accounts linked to Ranganathan’s network.
With the ED tightening its probe, more arrests are expected as investigators piece together the financial and administrative failures that led to one of the country’s worst recent pharmaceutical tragedies.
Meanwhile the Tamil Nadu Drugs Control Department on Monday announced the cancellation of the manufacturing license of Sresan Pharmaceutical company, the manufacturer of Coldrif cough syrup, linked with deaths of at least 22 people in Madhya Pradesh.
The state health department stated that the company has been officially shut down after its investigation of toxic contaminants, specifically Diethylene Glycol (DEG), in their cough syrup, Coldrif.
Additionally, the department ordered comprehensive inspections across all pharmaceutical manufacturing units in Tamil Nadu, and large-scale inspections are currently in progress throughout the State.
Additionally, the Drugs Controller General of India (DCGI) has issued a directive to all States and Union Territories, calling for strict compliance with the Drugs and Cosmetics Rules, 1945, for the testing of raw materials and finished pharmaceutical formulations.
