Chief Inspector Ebenezer Sekyi in a phone conversation with Ghanaweb said the substance was poured into the stream by a tie and dye manufacturer.
He said the police have been able to gather some evidence from the tie and dye factory.
Chief Inspector Sekyi added that they are still looking into the matter and will take the appropriate action in due time.
Residents of the New Juaben Municipality woke up to an unusual sight in the early hours of Saturday as the stream had turned red.
The residents who were shocked by the news trooped to the stream in their numbers to have a view for themselves, reading different superstitious meanings into it.
