ED Searches 29 Premises Across Six Cities in Share Investment Fraud Probe

The agency seized digital devices, financial records and other documents during the operation.

According to an official statement, the ED’s Mumbai Zonal Office-I carried out the searches under the Prevention of Money Laundering Act (PMLA), 2002. The locations covered Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat and Bhavnagar.

The investigation concerns alleged manipulation of shares in R M Drip and Sprinklers Systems and R&B Denims Ltd.

The premises searched included the offices of the two companies, residences of their promoters, locations linked to individuals who were allotted shares at low prices, offices of stockbroking and finance firms, and properties associated with people suspected of operating promotional WhatsApp groups, the agency said.

The ED’s investigation found that 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 money used to purchase the securities allegedly came from a limited network of connected individuals, firms and lenders. The agency said the share prices were subsequently pushed up over several months, while ownership of the shares largely remained concentrated among the same group.

The investigation further revealed that between late December 2025 and February 2026, WhatsApp communities operating under names such as “Multibagger Stocks” circulated daily buy recommendations for the two shares, targeting retail investors.

According to the ED, the groups were operated using SIM cards registered in other people’s names in Haryana and Mumbai, while the operations were allegedly managed from Bhavnagar in Gujarat.

The promotional messages reportedly attracted a sharp increase in buyers, with the number of investors purchasing the two shares rising from around 3,400 to more than one lakh.

On February 25, 2026, the WhatsApp groups were abruptly deleted. The agency said both stocks subsequently hit the lower circuit and lost around 70 per cent of their value within days.

The alleged scheme left more than one lakh small investors facing substantial losses, with many unable to sell their holdings, the ED said.