New Delhi, 16 October (H.S.): The Enforcement Directorate (ED) on Friday conducted searches at 29 locations across six cities in connection with the alleged manipulation of shares of listed companies. The investigation revealed that investors were repeatedly encouraged through WhatsApp groups to purchase shares of two companies. Subsequently, the share prices of both companies suffered a steep decline, causing losses to more than 100,000 retail investors. During the searches, the ED seized transaction records, digital devices, documents and property-related papers.

The ED’s Mumbai Regional Office-I carried out the operation in Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat and Bhavnagar under the Prevention of Money Laundering Act (PMLA), 2002. The searches were part of an investigation into alleged manipulation of shares of RM Drip and Sprinklers Systems Limited and R&B Denims Limited.

The premises searched included the offices of the two companies, the residences of their promoters, locations linked to individuals who had obtained shares at low prices, offices of stockbroking and financial firms, and premises associated with individuals allegedly operating WhatsApp groups to promote the stocks.

According to the ED’s investigation, between April 2023 and March 2024, the two companies issued more than 35 million shares and convertible warrants to selected individuals and entities. A substantial portion of the funds used to pay for these securities came from a network of interconnected individuals, companies and lenders. In the months that followed, the share prices of both companies were repeatedly driven upwards, while most of the shares remained concentrated in the hands of a select group of people.

The investigation further revealed that, between late December 2025 and February 2026, daily messages recommending the purchase of these shares were circulated through WhatsApp groups bearing names such as ‘Multibagger Stocks’.

According to the ED, SIM cards registered in the names of other individuals in Haryana and Mumbai were used to operate these groups, while their activities were allegedly coordinated from Bhavnagar in Gujarat.

Following the circulation of these messages, the number of buyers of shares in the two companies rose from approximately 3,400 to more than 100,000. On February 25, the WhatsApp groups were abruptly deleted. Subsequently, the shares of both companies hit their lower circuit limits, and their prices fell by around 70 per cent within just a few days.

The sharp decline caused substantial losses to more than 100,000 small investors, many of whom were left holding shares that had become difficult to sell.

During the searches, the ED seized documents relating to the alleged irregularities, digital devices, share transaction records and property-related papers. Further investigation into the case is underway.

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Hindusthan Samachar / Jun Sarkar