States » WestPosted at: Oct 16 2026 5:28PM


Maha: Over 1 lakh investors suffer heavy losses as ED probes alleged stock price rigging

Mumbai, Oct 16 (UNI) The Directorate of Enforcement (ED) conducted searches at 29 premises across six cities today as part of a money laundering investigation into alleged manipulation of shares of listed companies R M Drip and Sprinklers Systems Ltd and R&B Denims Ltd, which reportedly caused substantial losses to more than one lakh retail investors.
Officials from the ED's Mumbai Zonal Office-I carried out the searches under the Prevention of Money Laundering Act, 2002, in Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat and Bhavnagar.
The premises covered included offices of both companies, residences of their promoters and individuals allotted shares at discounted prices, stockbroking and finance establishments, and locations linked to suspected operators of promotional WhatsApp groups.
According to the investigation, the companies issued more than 3.5 crore shares and convertible warrants to selected individuals and entities between April 2023 and March 2024. Much of the investment reportedly originated from a limited network of connected individuals, firms and lenders. Share prices subsequently increased steadily while substantial holdings remained concentrated among the same investors.
Between late December 2025 and February 2026, WhatsApp communities bearing names such as Multibagger Stocks allegedly circulated daily purchase recommendations targeting retail investors.
Investigators found that these groups operated from Bhavnagar using SIM cards registered in other people's names in Haryana and Mumbai. Following the promotional messages, the number of buyers in the two stocks reportedly increased from approximately 3,400 to more than one lakh.
On February 25, 2026, the WhatsApp groups were abruptly deleted. Both stocks subsequently hit their lower circuit limits and lost approximately 70 per cent of their value within days, leaving numerous small investors facing substantial losses and unable to sell their holdings.
During the searches, ED officials seized documents, digital devices, share transaction records and property-related papers considered relevant to the investigation.
Further investigation is ongoing.
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