ED Searches 29 Premises Across 6 Cities Including Mumbai, Ahmedabad In Share Price Manipulation Probe

Mumbai: Directorate of Enforcement (ED), Mumbai Zonal Office-I has conducted search operations on 16.10.2026 at 29 premises across 6 cities, Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat and Bhavnagar under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, in connection with the manipulation of the shares of listed companies including M/s R M Drip and Sprinklers Systems Ltd and M/s R&B Denims Ltd.

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The premises searched include the offices of the two companies, the residences of their promoters, of persons to whom shares were allotted at low prices, offices of stock-broking and finance firms, and premises of persons suspected to have operated the promotional WhatsApp groups. The investigation carried out under the provisions of PMLA, 2002 revealed that between April 2023 and March 2024, the two companies issued over 3.5 crore shares and convertible warrants, to selected persons and entities. A large part of the money paid for these shares came from a small circle of connected persons, firms and lenders. Over the following months the share prices were steadily pushed up, while the shares largely stayed in the same hands.

The investigation also revealed that from the end of December 2025 to February 2026, WhatsApp communities with names such as "Multibagger Stocks" sent daily "buy" tips on these shares to gullible retail investors. These groups were run on SIM cards obtained in the names of other persons in Haryana and Mumbai, but operated from Bhavnagar, Gujarat. Lured by the tips, the number of buyers in the two shares rose from about 3,400 to over 1 lakh.

On 25.02.2026 the WhatsApp groups were suddenly deleted. Both shares fell to the lower circuit and lost about 70% of their value within days, leaving more than one lakh small investors with heavy losses and shares that could not be sold.

During the search operations, various incriminating documents, digital devices, records of share transactions and property documents have been found and seized. Further investigation is under progress.