The Enforcement Directorate (ED) today conducted searches at 29 premises across six cities in connection with the alleged manipulation of shares of listed companies, including R M Drip and Sprinklers Systems Limited and R and B Denims Limited. The searches were carried out in Mumbai and Nashik in Maharashtra, and Ahmedabad, Gandhinagar, Surat and Bhavnagar in Gujarat. According to the ED, the investigation revealed that 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 WhatsApp groups with names such as ‘Multibagger Stocks’ circulated promotional messages encouraging retail investors to buy the shares. This reportedly led to an increase in the number of buyers from around 3,400 to more than one lakh.
The ED further stated that the groups were suddenly deleted on 25 February this year. Following this, shares of both companies hit the lower circuit and lost around 70 per cent of their value within days, causing heavy losses to more than one lakh small investors. During the searches, the agency seized incriminating documents, digital devices, share transaction records and property documents.
