Chennai: The Enforcement Directorate (ED) on Monday conducted 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 raids follow 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 ED’s action comes after the arrest of Sresan Pharmaceuticals’ owner, G. Ranganathan, 75, who was apprehended by a Special Investigation Team (SIT) from Madhya Pradesh with assistance from Chennai Police on October 9. Ranganathan, who had been absconding since the deaths were reported, was traced through electronic surveillance and taken into custody during a late-night operation at his residence in Kodambakkam.
Following his arrest, police raided the company’s manufacturing unit in Kancheepuram, seizing key production records, drug samples, and regulatory documents. Investigations revealed more than 300 safety and compliance violations at the plant, including the use of non-pharmaceutical-grade chemicals. Tests conducted in Chennai confirmed that the cough syrup contained 48.6 per cent diethylene glycol (DEG), a highly toxic industrial solvent known to cause irreversible kidney failure if ingested.
Officials believe substandard ingredients were deliberately used to reduce production costs, leading to the contamination.
This is the third major ED operation targeting pharmaceutical companies in Chennai in recent months. In September, the agency raided premises linked to Arvind Remedies Ltd in connection with a Rs 637-crore bank loan fraud. Earlier, in April 2024, it had searched 30 locations across Tamil Nadu as part of the Jaffer Sadiq drug trafficking and money laundering investigation, which exposed an international narcotics network.
The ongoing raids aim to uncover possible financial irregularities, fund diversions, and collusion between Sresan Pharmaceuticals and state drug control officials. Sources said the ED is also investigating whether illegal proceeds were routed through shell firms and benami accounts associated with Ranganathan’s network.
With the probe intensifying, more arrests are likely as investigators examine the financial and administrative lapses that led to one of India’s worst pharmaceutical tragedies in recent years.