ED freezes Rs 200 crore in trading accounts in alleged WhatsApp pump-and-dump case
The ED searched 29 premises in six cities on 16 October 2026 in what it alleges was a WhatsApp-driven pump-and-dump in shares of R M Drip and Sprinklers Systems and R&B Denims.
The Enforcement Directorate (ED) searched 29 premises in Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat and Bhavnagar on 16 October 2026 under the Prevention of Money Laundering Act (PMLA), 2002. The agency said the searches relate to the alleged manipulation of shares of listed companies, including R M Drip and Sprinklers Systems Ltd and R&B Denims Ltd. The ED said it has frozen trading accounts worth about Rs 200 crore.
What Happened
According to the ED, the premises searched included the offices of the two companies, the homes of their promoters, and premises of people allotted shares at low prices, stock-broking and finance firms, and suspected operators of promotional WhatsApp groups.
The ED said that between April 2023 and March 2024 the two companies issued over 3.5 crore shares and convertible warrants to selected persons and entities. This is called a preferential allotment. The agency alleges that much of the money for these allotments came from a small circle of connected persons, firms and lenders, and that share prices were then steadily pushed up while the shares largely stayed in the same hands.
According to the ED, from late December 2025 to February 2026, WhatsApp communities with names such as "Multibagger Stocks" sent daily "buy" tips on these shares to retail investors. The ED said the groups ran on SIM cards obtained in other people's names in Haryana and Mumbai but were operated from Bhavnagar, Gujarat. The agency alleges that the allottees then sold part of their holdings to a large number of investors drawn in by the tips.
The ED said it seized documents, digital devices, share-transaction records and property papers. These are allegations, not findings of guilt; the accused are presumed innocent until proven guilty in court, and due process continues. Further investigation is under way, the agency said.
What It Means
According to the ED, tips pushed through WhatsApp, X, SMS and other channels were used to build buying interest in these shares. The ED said the number of buyers in the two shares rose many times over during the tip campaign, which pushed prices up further.
Investors who believe they lost money to a stock-tip scheme run over messaging apps can report it at https://cybercrime.gov.in or on helpline 1930.
This report describes enforcement actions and allegations on the public record, attributed to the officials cited. An order, FIR or chargesheet is not a conviction; parties are presumed innocent until proven guilty.
Named in this report, or spotted an error? Corrections and responses: editor@oquilia.com. We correct errors promptly and record responses from named parties.
Sources & Citations
- Enforcement Directorate press release — Enforcement Directorate