CHENNAI: The Enforcement Directorate on Monday searched nine premises of Tamil Nadu Drugs Control Department officials and Sresan Pharmaceuticals as part of a money laundering investigation related to the probe into the deaths of over 20 children in Madhya Pradesh allegedly due to the consumption of Coldrif cough syrup.
Sources said evidence showing collusion between two drug inspectors and the pharma firm has been uncovered during a preliminary probe.
Meanwhile, the Tamil Nadu Drug Control Department on Monday permanently cancelled the firm’s manufacturing licence. The process of sealing the unit by the Kancheepuram revenue department is under way, officials said.
According to sources, the ED searched nine locations in Chennai and Kancheepuram, including the premises of the pharma company, residences of G Ranganthan, owner of the firm; Maheshwar, the firm’s officer heading its quality control unit; Varalakshmi, the officer in-charge of procurement of raw materials; and Hariharan, its head of finance. The house of the former quality control head Jayaraman, who passed away, was also searched, sources added.
Further, the houses of two TN drug inspectors who were responsible for inspecting Sresan Pharma, which manufactured the cough syrup, were also searched. Digital evidence of the inspectors’ collusion with the company has been found, sources said. The ED has taken cognisance of two FIRs as predicate offences to start its probe.
Profits earned from contaminated cough syrup to be probed
While the first is the FIR of Madhya Pradesh police in the cough syrup deaths, the second FIR is a corruption case registered by Tamil Nadu’s Directorate of Vigilance and Anti-Corruption (DVAC) in July against PU Karthikeyan, the then director (in-charge) of the Tamil Nadu Drug Control department. Karthikeyan was trapped by DVAC while allegedly accepting a bribe of Rs 25,000 from a Vellore-based cosmetics manufacturer in exchange for a government licence permitting the manufacture of soaps. He was arrested by DVAC after being caught red-handed with the bribe money.
Sources further said that the profits earned by the pharma company through the contaminated cough syrup will be considered the proceeds of crime, which ED will probe. Meanwhile, Sresan Pharma’s manufacturing licence was cancelled four days after its owner Ranganathan (75) was arrested by the Madhya Pradesh Special Investigation Team in Ashok Nagar. He had allegedly absconded after a criminal complaint was filed by the Drug Control Department at Sunguvarchathram Police Station on October 8.
Investigations into the manufacturing unit began on October 1, when the Madhya Pradesh Drug Control Department alerted Tamil Nadu officials about the deaths. A team led by the senior drugs inspector inspected the firm’s unit, and the sale of the syrup was banned that same evening.
By October 2, tests confirmed the presence of Diethylene Glycol, a toxic industrial chemical, and a stop-production order was issued on October 3. The entire stock of Coldrif syrup was seized from wholesalers and retailers by October 8. The company had earlier faced regulatory action in 2021 and 2022, while two senior drug inspectors were suspended last year for failing to conduct proper inspections, officials said.
(With inputs from Rajalakshmi Sampath @ Chennai)
