Mumbai, October 19, 2026: The Enforcement Directorate (ED) has frozen trading accounts worth around Rs 200 crore and seized digital devices, share transaction records and property documents during searches at 29 premises across six cities in a stock manipulation case involving two listed companies, R M Drip and Sprinklers Systems Ltd and R&B Denims Ltd, the central agency said on Monday.
The searches, conducted on October 16, were part of an investigation into an alleged “pump-and-dump” scheme in which preferential allottees acquired shares at low prices and later sold part of their holdings to retail investors after a coordinated promotional campaign on WhatsApp, X (formerly Twitter), SMS and other platforms drove up share prices.
ED Identifies Beneficiaries Of Alleged Scheme
During the searches, the ED identified clusters of beneficiaries linked through family and business connections, including Affluence Gems and associated entities, Kawa HUF and associated entities, and Komalay Consultancy and associated entities. The agency said these beneficiaries allegedly acquired shares in the two companies through preferential warrants before the promotional campaign generated buying interest among retail investors.
The searches were conducted by the ED’s Mumbai Zonal Office-I under the Prevention of Money Laundering Act (PMLA) at premises in Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat and Bhavnagar. The premises included the offices of the two companies, residences of their promoters and persons who received preferential allotments, stockbroking and finance firms, and locations linked to people suspected of operating promotional WhatsApp groups.
Share Allotments And Prices Under Scrutiny
According to the agency’s investigation, the two companies issued more than 3.5 crore shares and convertible warrants to selected individuals and entities between April 2023 and March 2024. A substantial portion of the funds used for these allotments allegedly came from a small circle of connected individuals, firms and lenders. The share prices were subsequently pushed up over several months, while a large part of the holdings remained concentrated among the same group of investors, the agency said.
WhatsApp Groups Allegedly Promoted Stocks
The investigation revealed that between late December 2025 and February 2026, WhatsApp groups, including those operating under names such as “Multibagger Stocks”, circulated daily buy recommendations for the two stocks to retail investors. The groups allegedly operated using SIM cards obtained in the names of other persons in Haryana and Mumbai, while being run from Bhavnagar in Gujarat.
The promotional campaign allegedly drew a large number of retail investors into the stocks, driving up buying interest, trading volumes and share prices. This allegedly allowed preferential allottees to sell part of their holdings to a large number of investors, the ED said.
Also Watch:
With Rs 200 crore in trading accounts frozen and extensive digital and documentary evidence secured, the ED is widening its probe to track the full monetary trail and identify additional facilitators behind the cross-state market manipulation ring.
To get details on exclusive and budget-friendly property deals in Mumbai & surrounding regions, do visit: https://budgetproperties.in/
