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

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

The search operations targeted the offices of the two companies, residences of their promoters, individuals who were allotted shares at low prices, stock-broking and finance firms' offices, and properties of persons suspected of operating promotional WhatsApp groups. The investigation uncovered that between April 2023 and March 2024, the two companies issued more than 3.5 crore shares and convertible warrants to a limited circle of connected persons, firms, and lenders. A significant portion of the money paid for these shares originated from this circle.

Following the issuance of shares, their prices steadily increased as they remained in the same hands. WhatsApp communities with names such as "Multibagger Stocks" began sending daily buy tips to retail investors from the end of December 2025 to February 2026. These groups operated from Bhavnagar, Gujarat, using SIM cards registered in other persons' names in Haryana and Mumbai. The number of buyers in the two shares rose from approximately 3,400 to over 1 lakh.

On 25.02.2026, the WhatsApp groups were abruptly deleted, causing the shares to plummet and lose about 70% of their value within days. Over one lakh small investors suffered heavy losses, and the shares became unsellable. During the search, incriminating documents, digital devices, share transaction records, and property documents were seized. Further investigation is currently underway.