ED Searches 29 Sites in Alleged RM Drip, R&B Denims Share Rigging
The Enforcement Directorate (ED) on Friday searched 29 premises in six cities in a money laundering investigation into the alleged manipulation of shares of RM Drip and Sprinklers Systems Ltd and R&B Denims Ltd. The searches by the agency’s Mumbai Zonal Office-I were carried out under the Prevention of Money Laundering Act, 2002, in Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat and Bhavnagar.
What the ED Alleges
According to the agency’s account reported by The Tribune, the two companies issued more than 3.5 crore shares and convertible warrants to selected persons and entities between April 2023 and March 2024. A large share of the payments allegedly came from a small group of connected people, firms and lenders, and share prices were then pushed up while most shares stayed with the same holders.
Between late December 2025 and February 2026, WhatsApp communities with names such as “Multibagger Stocks” allegedly sent daily buy tips to retail investors. Investigators said the groups were run from Bhavnagar in Gujarat using SIM cards registered in other people’s names, and that the number of buyers rose from about 3,400 to more than one lakh.
Premises Searched and Material Seized
The premises searched included the offices of both companies, the homes of their promoters and of people allotted shares at low prices, offices of stock-broking and finance firms, and the premises of people suspected of running the promotional groups. The ED said it seized documents, digital devices, share transaction records and property papers.
ED sources said the WhatsApp groups were deleted on February 25, 2026. Both stocks then hit the lower circuit and lost about 70% of their value within days. The investigation is continuing, and none of the allegations has been tested in court.
Why It Matters for Small Investors
UNI reported that more than one lakh retail investors suffered heavy losses, and The Tribune said many were left holding shares they could not sell. The case shows how buying on tips from unknown messaging groups can leave ordinary savers exposed when prices collapse.
Market regulator SEBI allows only registered investment advisers and research analysts to give stock recommendations. Checking an adviser’s registration before acting on a tip is one simple step investors can take. The ED has previously acted against firms linked to betting apps and in other money laundering cases.
Further action will depend on what the seized records show as the probe moves forward.
Based on reporting by The Tribune and UNI.
Image: The Tribune / File.
