(MENAFN- IANS) Chennai, Oct 13 (IANS) 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 ED's investigation follows the arrest of Sresan Pharmaceuticals' owner, G. Ranganathan (75), who was nabbed by a Special Investigation Team (SIT) from Madhya Pradesh with the help of Chennai Police on October 9. Ranganathan, who had been absconding since the deaths were reported, was traced through electronic surveillance and arrested during a late-night operation around 1:30 a.m. at his Kodambakkam residence.

Following the arrest, police teams raided the company's Kancheepuram manufacturing facility, seizing crucial production records, drug samples, and regulatory documents.

Investigations revealed over 300 safety and regulatory violations at the plant, including the use of non-pharmaceutical grade chemicals. Laboratory tests 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 when ingested.

Officials suspect that substandard ingredients were deliberately used to cut costs, leading to the contamination.

This marks the third major ED action against pharmaceutical firms in Chennai recently.

In September, the agency raided multiple premises linked to Arvind Remedies Ltd over a Rs 637-crore bank loan fraud. Earlier, in April 2024, the ED had searched 30 locations across Tamil Nadu in connection with the Jaffer Sadiq drug trafficking and money laundering case, exposing an international narcotics network.

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.

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