(Bloomberg) -- A unit of Mexican chemical company Grupo Pochteca is the subject of an investigation by U.S. and local authorities for its alleged role in importing precursors used to make fentanyl, a powerful opioid, into the Latin American country, according to two people with direct knowledge of the matter.

Mexico authorities are looking into 49 other companies in relation to the probe, according to one of the people, who spoke on condition of anonymity because the person was not authorized to talk to the media about the matter. Pochteca accounts were frozen by Mexico as part of a joint binational investigation into the importation of fentanyl precursor chemicals, the person said.

Grupo Pochteca said in a statement on Tuesday that Mexican financial authorities had frozen accounts of its subsidiary Pochteca Materias Primas. The company said it did not know why the accounts had been blocked and that it was seeking clarification from authorities. It said none of its subsidiaries traded in precursors.

“Grupo Pochteca categorically rejects any statement that links us to any type of contact with illegal activities and organizations,” the company said in the statement provided to Bloomberg News.

Mexican media outlet Milenio first reported the investigation. Pochteca stock dropped 13.9% on Tuesday, its biggest decline since 2008, after the Milenio report. 

The probe is the first of its kind that investigates a listed Mexican company for alleged involvement in diverting precursors. The joint U.S.-Mexico investigation is also a sign of renewed cooperation between President Andres Manuel Lopez Obrador and U.S. President Joe Biden after both countries hit a low point late last year when Mexico said the U.S. had falsely accused one of its generals of drug trafficking.

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The U.S. and Mexico have been working together on a financial investigation, a U.S. embassy official in Mexico City said by telephone, declining to provide details. Mexico’s attorney general’s office did not immediately respond to a request for comment.

Grupo Pochteca provides chemicals across 40 industries from food to mining and water treatment. It has most of its operations in Mexico but also has distribution centers across Latin America. 

Its chief executive officer and co-founder, Armando Santacruz, is the son-in-law of Antonio del Valle Ruiz, the chairman of Kaluz SA and the brother in law of Antonio del Valle Perochena, the head of the country’s top business lobby Consejo Mexicano de Negocios. Santacruz is also the president of the board of Mexicanos Unidos Contra la Delincuencia, a civil society group that has criticized the current and past administrations efforts to fight crime.

The news comes after a U.S. delegation led by Secretary of State Antony Blinken visited Mexico last week to meet with top officials in order to increase security cooperation. Both countries agreed on Oct. 8 to focus on companies suspected of diverting precursor chemicals for methamphetamine and fentanyl as they seek to stop the flow of deadly opioids across their borders.

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