ED raids 29 sites in WhatsApp pump-and-dump scam

This is a press release from the Directorate of Enforcement (ED) announcing search operations conducted on October 16, 2026, under the Prevention of Money Laundering Act (PMLA) regarding a 'pump and dump' share manipulation scam involving R M Drip and Sprinklers Systems Ltd and R&B Denims Ltd. It matters to citizens as it details how retail investors were targeted through WhatsApp tips and suffered losses due to preferential share allotments and price manipulation.

Who it concerns: The Directorate of Enforcement (ED), Mumbai Zonal Office-I; the listed companies R M Drip and Sprinklers Systems Ltd and R&B Denims Ltd; their promoters; preferential allottees and connected entities (including Affluence Gems, Kawa HUF, and Komalay Consultancy); stock-broking and finance firms; and retail investors who purchased shares based on WhatsApp tips.

What the ED says it did

• ED conducted searches at 29 premises in Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat, and Bhavnagar on October 16, 2026.
• Between April 2023 and March 2024, the two companies issued over 3.5 crore shares and convertible warrants to selected persons and entities.
• A significant portion of the funds for these allotments came from a small circle of connected persons, firms, and lenders.
• From late December 2025 to February 2026, WhatsApp groups (e.g., 'Multibagger Stocks') sent daily 'buy' tips to retail investors, operated from Bhavnagar using SIM cards registered in Haryana and Mumbai.
• Preferential allottees sold their shares to retail investors after the prices were pushed up by the promotional campaign.
• ED froze trading accounts worth approximately Rs. 200 crores belonging to the identified persons and connected entities.
• ED seized incriminating documents, digital devices, share transaction records, and property documents.

Also in the document

• The investigation identified specific clusters of family-linked beneficiaries, including Affluence Gems, Kawa HUF, and Komalay Consultancy.
• The promotional campaign utilized multiple channels including WhatsApp, Twitter (X), and SMS.
• The shares largely remained in the hands of the original allottees during the period when prices were being pushed up.