After raids in six cities, ED freezes Rs 200 crore of two firms
The Enforcement Directorate (ED) has frozen Rs 200 crore in trading accounts of two firms, R M Drip and Sprinklers Systems Ltd. (RMDSSL) and Surat-headquartered R&B Denims Ltd., following raids in six cities in connection with a pump and dump share manipulation scam. The ED's actions followed the Securities and Exchange Board of India’s (SEBI) crackdown on suspected stock market manipulation involving the two companies.
The raids, conducted under the Prevention of Money Laundering Act (PMLA), targeted 29 locations in six cities, including offices of the firms, residences of their promoters, and WhatsApp groups promoting the shares to retail investors. The ED identified clusters of family-linked beneficiaries in the scheme and revealed that over 3.5 crore shares and convertible warrants were issued between April 2023 and March 2024, with a significant portion of the money paid for these allotments coming from a small circle of connected persons, firms and lenders.
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