The Enforcement Directorate has frozen trading accounts holding about Rs 200 crore and searched 29 premises across six cities as part of a money laundering investigation into an alleged pump-and-dump operation involving shares of R M Drip and Sprinklers Systems Ltd. and R&B Denims Ltd.
The searches, conducted under the Prevention of Money Laundering Act, covered company offices, promoters, stockbrokers, financiers, preferential allottees and individuals suspected of operating stock recommendation groups on WhatsApp, the agency said on Oct. 21, 2026.
The searches, conducted on Oct. 16 across Ahmedabad, Mumbai, Kolkata, Surat, Bhavnagar and Anand, covered company offices, promoters, stockbrokers, financiers, preferential allottees and individuals allegedly linked to WhatsApp-based stock recommendation networks, the agency said.
The action follows an ongoing SEBI investigation that alleged a coordinated scheme in which connected entities acquired shares through preferential allotments and later promoted the stocks through social media and messaging platforms to attract retail investors before exiting their positions, sources confirm.
According to the ED, more than 3.5 crore shares and convertible warrants were issued between April 2023 and March 2024 to a network of entities linked through common funding arrangements and financial transactions. Investigators allege the shares remained concentrated within the same group as prices rose.
The agency identified beneficiary clusters including entities linked to Affluence Gems, Kawa HUF and Komalay Consultancy, which it said acquired shares through preferential issuances before the promotional campaign began.
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The ED said WhatsApp groups carrying names such as "Multibagger Stocks" circulated daily buy recommendations on the two stocks between December 2025 and February 2026, helping drive a surge in retail participation before preferential allottees allegedly sold shares into the increased demand
The ED said the recommendation groups were allegedly operated from Bhavnagar in Gujarat using SIM cards procured in the names of other individuals. The agency alleges preferential allottees monetised their holdings while retail investors entered the stocks at elevated prices.
Investigators also seized digital devices, transaction records, property documents and other materials during the searches.
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