ED Freezes ₹200 Crore in Trading Accounts in Share Manipulation Probe in Gujarat, Maharashtra

Ahmedabad: The Enforcement Directorate (ED) has frozen trading accounts worth around ₹200 crore in connection with an alleged share manipulation scheme involving two listed companies, R M Drip and Sprinklers Systems Ltd and R&B Denims Ltd.

The ED’s Mumbai Zonal Office-I conducted search operations on October 16 at 29 premises across Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat and Bhavnagar under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.

The searches covered the offices of the two companies, residences of their promoters and persons who were allotted shares at low prices, offices of stockbroking and finance firms, and premises of individuals suspected of operating promotional WhatsApp groups.

Preferential allotments to connected persons

According to the ED investigation, between April 2023 and March 2024, the two companies issued more than 3.5 crore shares and convertible warrants to selected individuals and entities. A substantial portion of the funds used for these allotments allegedly came from a small network of connected individuals, firms and lenders.

Over the following months, the share prices were allegedly driven up, while the shares largely remained within the same circle of holders.

WhatsApp campaign targeted retail investors

From late December 2025 to February 2026, WhatsApp groups, including those named “Multibagger Stocks”, circulated daily buy tips on the two stocks to retail investors.

The groups reportedly operated using SIM cards registered in the names of other individuals in Haryana and Mumbai but were managed from Bhavnagar in Gujarat.

According to the ED, the campaign attracted a significantly larger number of buyers to the two stocks, further pushing up their prices.

Shareholders allegedly sold shares amid rising demand

The ED stated that R M Drip and Sprinklers Systems Ltd (RMDSSL) was promoted through various WhatsApp groups to generate buying interest. This allegedly led to a significant increase in the stock’s price and trading volumes during the promotional campaign.

The investigation found that preferential allottees took advantage of the increased buying interest to sell part of their shareholdings to a large number of investors.

Searches uncover documents and digital evidence

During the searches, the ED identified groups of beneficiaries linked through family and business connections, including Affluence Gems and others, Kawa HUF and others, and Komalay Consultancy and others.

The investigation allegedly revealed that these beneficiaries had acquired shares in the targeted companies at low prices through preferential warrants. The share prices were subsequently driven up through a systematic promotional campaign across WhatsApp, X (formerly Twitter), SMS and other channels.

The agency also seized incriminating documents, digital devices, share transaction records and property documents during the searches.

Further investigation is underway. DeshGujarat