Sresan Pharma Cough Syrup Case: ED Attaches Properties Worth Rs 2.04 Crore

CHENNAI:
The Directorate of Enforcement (ED), Chennai Zonal Office, has provisionally attached immovable properties worth Rs 2.04 crore belonging to G. Ranganathan, proprietor of M/s Sresan Pharmaceutical Manufacturer, in connection with the money laundering probe into the adulterated cough syrup tragedy that led to the deaths of more than 20 children.

The attachment, made on December 2 under the Prevention of Money Laundering Act (PMLA), covers two residential flats in Kodambakkam, Chennai, owned by Ranganathan and his family members. The ED action originates from two FIRs that triggered the money laundering investigation.

The Madhya Pradesh Police registered the first FIR against Ranganathan for manufacturing and selling the adulterated Coldrif cough syrup that caused multiple deaths.

The case was booked under Section 105 of the Bharatiya Nyaya Sanhita (corresponding to Section 304 IPC).

Investigations found that the cough syrup, manufactured at Sresan Pharma’s Chennai unit, contained dangerously high concentrations of toxic chemicals – Diethylene Glycol (DEG) at 48.6 per cent w/v and Ethylene Glycol (EG) at 46.28 per cent w/v. These chemicals, when consumed, can cause acute renal failure, and laboratory results confirmed that they were present far beyond safe limits.

More than 20 children in Madhya Pradesh died after consuming the contaminated syrup, while several others suffered severe kidney damage. Investigators have concluded that negligent and adulterated manufacturing practices adopted by Sresan Pharma directly contributed to the poisoning.

The second FIR, registered by the Chennai Anti-Corruption Bureau (ACB), is against P.U. Karthigeyan, Director (in-charge) and Joint Director of the Tamil Nadu Drugs Control Department, under Section 7 of the Prevention of Corruption (Amendment) Act, 2018.

The complaint alleges corruption and irregularities in drug regulation, including improper oversight in licensing and inspection of manufacturing units.

According to the ED, Sresan Pharmaceutical had been indulging in rampant unfair trade practices to suppress manufacturing costs and boost profits, which the agency classifies as Proceeds of Crime (POC).

The investigation revealed that the company used industry-grade raw materials instead of mandatory pharma-grade inputs and purchased them in cash without invoices to avoid creating a financial trail.

Despite regular contact between the company and officials of the Tamil Nadu Drugs Control Department, mandatory annual inspections under the Drugs and Cosmetics Rules were reportedly not conducted.

The ED had earlier conducted search operations at 10 locations linked to the proprietor of Sresan Pharma, drug control officials, licence agents, and associates.

Key documents related to financial dealings and evidence of adulterated manufacturing practices were seized during these searches. The ED has stated that further investigation is in progress.