Following drug seizure of controlled substance Ephedrine hydrochloride and pseudoephedrine hydrochloride of 18,500 kg quantity at its unit located at Solapur in Maharashtra, Avon Lifesciences Ltd has clarified that the drug seizure issue involving the company revolves around theft of the controlled substance.

Even as the company assures cooperation in the ongoing investigation, Maharashtra Food and Drug Administration (FDA) and anti- narcotics cell of Solapur police are trying to explore the network of racket involving sale and distribution of the drug methamphetamine to areas in Mumbai, Thane and Solapur made out of the controlled substances.

While the mastermind is still at large, the drug regulator is also trying to ascertain whether the racket is spread across other states encompassing Gujarat and Haryana in particular which may involve supplying of the narcotics.

According to official sources, the company has all relevant licences to manufacture, hold inventory and sale of Ephedrine Hydrochloride and Pseudoephedrine Hydrochloride which are controlled substance and classified under the narcotics category.

Ephedrine, by itself, is not an API that can be abused/misused and hence this material that has been seized along with stock at the factory is medicinal and holds zero street value, according to company officials.

As per industry estimates, going by the market price of Rs 3800 to 4000 of the overall valuation of 18,500 kg of the controlled substance works out to Rs.7 to Rs.8 crore.

In a notice issued to the Bombay Stock Exchange (BSE), the company said, “The company wants to assure all stakeholders that we have all valid licenses and statutory registrations for manufacturing, stocking and sale of all products manufactured at our Solapur site. Also all the material has been accounted for and stocked with due notice to concerned statutory authorities. The concerned matter revolves around theft of some material and we are ascertaining the same in active cooperation with the investigating authorities.”

The company was incorporated in 1993 as Avon Organics Ltd for manufacture of chemicals and intermediates. Arch Pharmalabs Ltd acquired 43.60 per cent stake in the company in December 2007 and a further 20 per cent stake in January 2009.

Commercial production of Ephedrine and Pseudoephedrine at Solapur site started in 2001. The company has all requisite permissions (including Form A) for manufacture, store, sale of controlled substances from Maharashtra FDA and Narcotics Control Bureau (NCB), Mumbai.

The company has various domestic and global regulatory approvals and has a wide client base in India and in overseas markets, spread over 40 countries. All sales are done as per strict KYC protocols. The company's shares are listed on the Bombay Stock Exchange (BSE).