ED raids RM Drip and RB Denims:Raids at 29 locations in 6 cities, including Mumbai and Nashik, over alleged share manipulation

The Enforcement Directorate (ED) has taken action in a case involving the manipulation of shares of two listed companies, M/s RM Drip and Sprinklers Systems Limited and M/s RB Denims Limited. The agency conducted raids at 29 locations across six cities, including Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat and Bhavnagar, on Friday, 16 October. The ED investigation has found that more than 1 lakh retail investors lost money after falling for tips circulated through fake WhatsApp groups. The ED raids covered the corporate offices of both companies, the residences of their promoters, the homes of individuals who acquired shares at low prices, and the offices of stockbroking and finance firms. In addition, searches were conducted at the premises of suspects allegedly operating WhatsApp groups for promoters. Several suspicious documents, digital devices, records of share transactions and property-related papers were seized during the operation. More than 3.5 crore shares and warrants issued An investigation under the PMLA revealed that between April 2023 and March 2024, the two companies issued more than 3.5 crore shares and convertible warrants to select individuals and entities. A large portion of the money paid for these shares came from a small circle of connected individuals, firms and lenders. In the months that followed, the share prices were continuously pushed upwards, while the shares largely remained with the same people. Fake WhatsApp communities were being operated from Bhavnagar The investigation further found that WhatsApp communities were created between late December 2025 and February 2026 under names such as “Multibagger Stocks”. Through these groups, straightforward retail investors were sent daily tips to buy these shares. These groups were being operated using SIM cards issued in the names of other people from Haryana and Mumbai, but were being run from Bhavnagar in Gujarat. Buyers rose from 3,400 to over 1 lakh The number of investors who bought shares in the two companies after being lured by fake tips rose rapidly. The number of buyers, initially around 3,400, suddenly crossed 1 lakh. Groups suddenly deleted on 25 February According to ED sources, all the WhatsApp groups were suddenly deleted on 25 February 2026. Soon after, the shares of both companies hit the lower circuit, and their prices fell by around 70% within just a few days. More than 1 lakh small investors suffered losses and were left stuck with shares that could not even be sold.