ED Searches 29 Premises Across Six Cities in WhatsApp-Linked ‘Pump-and-Dump’ Probe

The Enforcement Directorate (ED) has searched 29 premises across six cities in Maharashtra and Gujarat as part of a money-laundering investigation into an alleged WhatsApp-driven “pump-and-dump” scheme involving shares of two listed companies.

The ED’s Mumbai Zonal Office-I conducted the searches on Friday under the Prevention of Money Laundering Act (PMLA). The locations covered Mumbai and Nashik in Maharashtra, and Ahmedabad, Gandhinagar, Surat and Bhavnagar in Gujarat, according to an official statement issued on Monday.

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

The premises searched included the companies’ offices, residences of their promoters and individuals who had received shares at preferential prices, offices of stockbroking and finance firms, and locations linked to people suspected of running WhatsApp groups used to promote the stocks.

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

Investigators suspect that the share prices were subsequently driven upwards while a significant proportion of the holdings remained concentrated among the same group of investors.

The alleged promotional campaign took place between late December 2025 and February 2026, when WhatsApp groups operating under names such as “Multibagger Stocks” reportedly circulated daily buy recommendations to retail investors.

The ED claimed the groups used SIM cards registered in other people’s names in Haryana and Mumbai, while allegedly managing operations from Bhavnagar.

According to the agency, the campaign generated increased buying interest, trading volumes and share prices. Individuals who had received shares through preferential allotments allegedly used the heightened demand to sell portions of their holdings to retail investors.

During the searches, investigators identified clusters of beneficiaries linked through family relationships and associated entities, including Affluence Gems, Kawa HUF and Komalay Consultancy. The agency alleged that these beneficiaries had acquired shares at relatively low prices through preferential warrants before the stocks were promoted to investors.

The ED said the promotional activity extended beyond WhatsApp to platforms such as X, as well as SMS messages and other channels.

As part of the investigation, the agency has frozen trading accounts worth approximately ₹200 crore belonging to individuals and entities under scrutiny. It also seized documents, digital devices, share transaction records and property-related papers during the searches.

The investigation is ongoing. The allegations remain subject to the investigative and legal process.