PMLA Action Targets Real Estate Amid Investigation into Adulterated Cough Syrup and Corruption Allegations
Chennai : The Chennai Zonal Office of the Enforcement Directorate (ED) on 2 December 2025 provisionally attached immovable properties worth approximately Rs. 2.04 crore belonging to G. Ranganathan, proprietor of M/s Sresan Pharmaceutical Manufacturer, and his family members. The properties, comprising two residential flats in Kodambakkam, Chennai, were attached under the Prevention of Money Laundering Act (PMLA), 2002 as part of ongoing investigations into alleged financial crimes and regulatory violations.
ED initiated the probe based on two FIRs involving scheduled offenses:
1. Madhya Pradesh Police FIR: Filed against G. Ranganathan under Section 105 of the Bharatiya Nyaya Sanhita, 2023 (IPC 304) in connection with the manufacturing and sale of ColdRif cough syrup, which caused the deaths of more than 20 children. Laboratory analysis revealed dangerously high levels of Diethylene Glycol (DEG) 48.6% w/v and Ethylene Glycol (EG) 46.28% w/v, far exceeding safe limits. The investigation determined that the syrup’s toxicity was the result of negligent and adulterated manufacturing practices by M/s Sresan Pharmaceutical.
2. Chennai ACB FIR: Filed against P.U. Karthigeyan, Director (i/c) and Joint Director of the Drugs Control Department, under Section 7 of the Prevention of Corruption (Amendment) Act, 2018, alleging corruption in regulatory oversight.
Unfair Trade Practices and Proceeds of Crime
The ED investigation found that M/s Sresan Pharmaceutical had engaged in systematic unfair trade practices to reduce production costs and maximise profits, which constitute Proceeds of Crime (POC). Key findings include:
- Use of industrial-grade raw materials instead of pharma-grade, without proper quality checks.
- Cash purchases without invoices, avoiding official records.
- Annual inspections mandated under the Drugs and Cosmetics Rules were not conducted, despite frequent interactions between the proprietor and Tamil Nadu Drugs Control officials.
These practices facilitated the concealment of illegal gains while compromising public safety.
Previous Search Operations and Seized Evidence
ED had earlier conducted searches at 10 locations, including Sresan Pharmaceutical offices, Drugs Control Department offices, license agents, and associated parties.
The searches resulted in seizure of key financial documents, digital devices, and evidence related to adulterated manufacturing. All seized materials are currently under detailed forensic examination to trace the flow of illicit funds and support further legal proceedings.
Ongoing Investigation and Legal Implications
The ED confirmed that investigations are continuing, focusing on financial transactions, immovable and movable assets, and corroborating evidence. Officials emphasized that the attachment aims to prevent misuse or transfer of assets until their lawful ownership is verified.
Authorities highlighted that the case sends a strong signal against corruption and fraudulent manufacturing practices. They warned that any involvement in adulterated drug production, financial irregularities, or regulatory non-compliance could attract serious legal consequences under the PMLA and IPC.
Public Warning and Regulatory Oversight
The ED underscored the importance of rigorous monitoring of pharmaceutical manufacturing and trade practices. Citizens and industry stakeholders were cautioned to remain vigilant against illegal operations and ensure full compliance with statutory norms.
This development reinforces that Enforcement Directorate’s scrutiny of financial crimes, corruption, and public safety violations remains uncompromising, safeguarding both investors and consumers.
