ED conducts searches in ₹600-crore share price manipulation case

Searches were conducted at 29 premises across Ahmedabad, Gandhinagar, Surat and Bhavnagar in Gujarat and Mumbai and Nashik in Maharashtra, ED officials said

MUMBAI: The Enforcement Directorate (ED) on Friday carried out searches in six cities including Mumbai and Nashik as part of its money laundering investigation linked to the alleged manipulation of share prices of two listed companies, which led to more than 100,000 small investors losing ₹600 crore, the suspected proceeds of crime in the case.

ED conducts searches in ₹600-crore share price manipulation case

Searches were conducted at 29 premises across Ahmedabad, Gandhinagar, Surat and Bhavnagar in Gujarat and Mumbai and Nashik in Maharashtra, ED officials said. The premises included offices of the two listed companies, RM Drip and Sprinklers Systems Ltd and R&B Denims Ltd, whose share prices were allegedly manipulated; residences of the promoters of these companies; the persons to whom shares were allotted allegedly at low prices; offices of some stock broking and finance firms; and premises of persons suspected to have operated promotional WhatsApp groups.

According to the ED officials, during the search, various allegedly incriminating documents, digital devices, records of share transactions and property documents were found and seized. The ED is probing the role of a market manipulator, who was earlier under the agency’s scanner in a separate investigation related to illegal/unethical trading, officials said.

The ED’s investigation has found that between April 2023 and March 2024, the two companies allegedly issued over 3.5 crore shares and convertible warrants (the right to purchase a company’s shares at a fixed future price) to select persons and entities. A large chunk of the payment for these shares was allegedly sourced from a small circle of connected persons, firms and lenders, after which share prices were allegedly “steadily pushed up” over months.

From end-December 2025 till February 2026, gullible retail investors were advised to buy these shares via WhatsApp communities, which were operated from Bhavnagar in Gujarat using SIM cards allegedly obtained in the names of people in Mumbai and Haryana, ED officials said. Lured by the tips provided via WhatsApp, the number of buyers of shares of the two firms rose to more than 100,000, officials said.

On February 25 this year, the WhatsApp groups were allegedly deleted. Subsequently, both the firms’ share prices tanked and lost about 70% of their value within days, leaving investors with losses worth ₹600 crore, an amount which is being seen as the suspected proceeds of crime in the case.

HT was unable to reach the two firms’ officials for a comment.