The Enforcement Directorate (ED) has seized two residential flats worth Rs 2.04 crore belonging to G. Ranganathan, the owner of Sresan Pharmaceutical Manufacturer. The action was taken on December 2 under the Prevention of Money Laundering Act (PMLA), reported ANI.
According to the report, these seizures are linked to the ongoing investigation into the company’s Coldrif cough syrup, which has been blamed for the deaths of more than 20 children in Madhya Pradesh.
Company used industrial-grade chemicals, bought inputs in cash
According to the ED, its investigation found that Sresan Pharmaceutical engaged in “rampant unfair trade practices” to suppress manufacturing costs and inflate profits, which the agency classified as proceeds of crime.
The probe revealed that the company allegedly used industry-grade raw materials instead of pharma-grade inputs in the production of medicines without conducting mandatory quality checks. These raw materials, the ED said, were bought in cash without invoices, allowing the firm to evade documentation and oversight.
The agency also found that while officials of the Tamil Nadu Drugs Control Department were in “frequent touch” with the proprietor, the annual inspections required under the Drugs and Cosmetics Rules were not conducted.
The Madhya Pradesh Police had earlier filed an FIR saying that Coldrif cough syrup contained extremely high levels of two dangerous industrial chemicals, diethylene glycol (48.6%) and ethylene glycol (46.28%). These chemicals can cause kidney failure.
The FIR says that children who consumed the syrup suffered acute kidney failure, and that the company’s careless and improper manufacturing methods caused the contamination.
A second FIR, filed in Chennai, accuses a senior official in the Tamil Nadu Drugs Control Department of corruption. The ED found that, though officials were frequently in touch with the Sresan owner, they did not conduct the annual inspections required under the law.
Company background unclear
Sresan Pharmaceutical Manufacturer, based in Kancheepuram, does not appear in official government records. A similarly named company, Sresan Pharmaceuticals Pvt. Ltd., was registered in 1990 but was struck off in 2009 and has not filed financial statements since then.
Despite these inconsistencies, product packaging, online listings and factory signage all point to the same locality in Chennai.
Ground reports have also shown that the chemicals used in the syrup were sourced locally from chemical traders and paint industry suppliers, often through cash or simple digital payments.
Regulatory action
The company’s manufacturing unit in Kancheepuram is now under investigation by both the Central Drugs Standard Control Organisation (CDSCO) and state drug authorities. The Tamil Nadu government has already ordered the company to stop production and issued a show-cause notice asking why its licence should not be cancelled.
The ED said investigations under the PMLA are ongoing, and further action will be taken based on additional findings.
