Oushadhi’s alleged financial irregularities under lens; Kerala Health Minister orders departmental inquiry

Published 8 August 2026 · politics

The Kerala government has ordered a departmental inquiry into alleged financial irregularities in Oushadhi, the State-run pharmaceutical company under the Department of AYUSH, while Health

The Kerala government has ordered a departmental inquiry into alleged financial irregularities in Oushadhi, the State-run pharmaceutical company under the Department of AYUSH, while Health Minister K. Muraleedharan has also sought a Vigilance inquiry into the allegations. The action follows a complaint submitted by P.B. Satheesh, director of Nerkazhcha, a Thrissur-based human rights organisation, alleging large-scale irregularities in construction contracts, procurement, financial management and accounting practices at the public sector undertaking. Muraleedharan directed the Principal Secretary (Health) to initiate a detailed financial inquiry through the Finance Inspection Wing and wrote to Home and Vigilance Minister Ramesh Chennithala seeking a preliminary inquiry by the Vigilance and Anti-Corruption Bureau (VACB). “The Finance Inspection Wing shall examine whether the applicable financial rules, tender procedures and accounting practices have been duly complied with and submit a comprehensive report containing specific findings and recommendations for further action, if warranted,” the Minister said in his direction to the Principal Secretary. In his letter to the Home Minister, Mr. Muraleedharan sought a Vigilance inquiry into the allegations concerning “lack of transparency, accountability and financial propriety” in the functioning of the State-owned institution.

He requested that the VACB first conduct a preliminary inquiry and, if the findings warrant, launch a detailed investigation. Tender norms In the complaint, Mr. Satheesh alleges that several construction works at Oushadhi were awarded to the Uralungal Labour Contract Co-operative Society (ULCCS) without following prescribed tender procedures. “Works including renovation of the manufacturing plant, warehouse and administrative building, besides installation of a fire-fighting system and an effluent treatment plant (ETP), were awarded through bid notifications instead of open tenders,” says the complaint. “The estimates submitted by ULCCS were accepted and work orders issued without any negotiation,” the complaint states. Although the works were awarded in urgency, several projects remained incomplete long after the stipulated completion period, it alleges. The complaint further contends that because the works were not awarded through regular tender procedures, Oushadhi would not be eligible to claim compensation for delays, resulting in substantial financial loss to the organisation. Nerkazhcha also alleges that ULCCS functioned both as consultant and contractor for the projects. In addition, eight other construction works—including the main entrance gate, walkways and landscaping—were allegedly entrusted to ULCCS without even issuing bid notifications.