The Enforcement Directorate (ED) has conducted searches at 29 premises across six cities in Maharashtra and Gujarat as part of a money-laundering probe into an alleged WhatsApp-driven 'pump-and-dump' scheme involving the shares of two listed companies, according to an official statement issued on Monday, 19 October 2026.

What the Searches Covered

The ED's Mumbai Zonal Office-I carried out the searches on Friday under the Prevention of Money Laundering Act (PMLA), targeting premises in Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat, and Bhavnagar. The premises included corporate offices of the two companies, residences of their promoters, offices of stockbroking and finance firms, and locations linked to individuals suspected of running promotional WhatsApp groups.

The investigation centres on alleged share-price manipulation in R M Drip and Sprinklers Systems Ltd (RMDSSL) and R&B Denims Ltd — both listed companies.

How the Alleged Scheme Worked

According to the ED, between April 2023 and March 2024, the two companies issued more than 3.5 crore shares and convertible warrants to selected individuals and entities. The agency alleged that a substantial portion of the funds used for these allotments originated from a small, interconnected group of persons, firms, and lenders — a structure consistent with preferential-allotment manipulation.

The share prices were allegedly pushed upward while a large proportion of the stock remained concentrated with the same group of holders. From late December 2025 to February 2026, WhatsApp communities with names such as 'Multibagger Stocks' allegedly circulated daily 'buy' recommendations targeting retail investors.

The ED said these groups operated using SIM cards registered in the names of other persons in Haryana and Mumbai, while their on-ground operations were allegedly run from Bhavnagar. Promotional content was allegedly spread across WhatsApp, X, SMS, and other channels to amplify buying interest.

Key Entities Identified

During the searches, the ED said it identified clusters of family-linked beneficiaries, including entities associated with Affluence Gems, Kawa HUF, and Komalay Consultancy. These entities had allegedly acquired shares at low prices through preferential warrants before the promotional campaign inflated market prices, enabling them to exit at a profit at the expense of retail buyers.

What Was Seized and Frozen

The agency froze trading accounts worth approximately ₹200 crore belonging to the persons and entities under investigation. It also seized documents, digital devices, share transaction records, and property-related papers during the raids. Further investigation is underway, the ED said.

This comes amid growing regulatory concern over the misuse of social media platforms for coordinated stock manipulation, particularly targeting retail investors who have entered markets in large numbers since the post-pandemic trading surge. Notably, this is among the larger PMLA actions taken against alleged social-media-driven market fraud in recent months.