ED Conducts Raids in Six Cities Over Share Investment Fraud
The Enforcement Directorate raided 29 locations across six cities, targeting a share manipulation fraud involving two listed companies.
Mumbai, October 16 (Daily Kiran) : The Enforcement Directorate (ED) launched a significant operation on Friday, conducting searches at 29 locations across six cities, including Mumbai and Ahmedabad. This action is part of an ongoing investigation into a share manipulation fraud linked to two publicly listed companies.
According to the ED, its Mumbai Zonal Office-I executed the searches under the Prevention of Money Laundering Act (PMLA) of 2002. The targeted cities included Nashik, Gandhinagar, Surat, and Bhavnagar, in addition to Mumbai and Ahmedabad.
The investigation focuses on share price manipulation involving companies such as RM Drip and Sprinkler Systems and R&B Denims Limited. The ED reported that the raids took place at the offices of these companies, the homes of their promoters, residences of individuals who received shares at discounted prices, as well as offices of stock-broking and finance firms. The operation also targeted individuals suspected of managing promotional WhatsApp groups.
The inquiry revealed that between April 2023 and March 2024, these companies issued over 3.5 crore shares and convertible warrants to select individuals and entities. A significant portion of the funds for these shares originated from a small network of connected individuals, firms, and lenders. In the following months, the share prices were artificially inflated, while ownership remained concentrated among a limited group.
The investigation further indicated that from late December 2025 to February 2026, WhatsApp groups named “Multibagger Stocks” provided daily tips to retail investors to buy these shares. These groups operated using SIM cards registered under different names in Haryana and Mumbai, but were managed from Bhavnagar, Gujarat.
As a result of these misleading tips, the number of buyers for the shares surged from approximately 3,400 to over 100,000. However, on February 25, 2026, these WhatsApp groups were abruptly deleted. The ED noted that the share prices plummeted, dropping to their lower circuit limits, resulting in a loss of nearly 70% of their value within days. This sudden decline left over 100,000 small investors with shares that became nearly impossible to sell.
