ED raids Mumbai, Ahmedabad and other cities in alleged ₹200 crore 'pump-and-dump' share manipulation case

The Enforcement Directorate on Monday froze ₹200 crores in trading accounts during searches it carried out across Maharashtra and Gujarat in 20 different locations in connection with an alleged 'pump and dump' share price manipulation scam involving some companies, news agency ANI reported.

The raids were carried out on 16 October in Nashik, Mumbai, Ahmedabad, Gandhinagar, Surat, and Bhavnagar under the PMLA 2002 in relation to the alleged manipulation of the shares of listed companies.

The central agency said that a number of documents that are incriminating in nature have been seized. Digital devices, share transaction records, and property documents have also been seized during the raid.

The premises that were searched included the offices of two firms, the residences of their promoters, residences of persons to whom shares were allotted at low prices, the offices of stock-broking and finance firms, as well as the premises of persons suspected to have been running the promotional online messaging groups.

The central agency said that its probe revealed that between the time period of April 2023 and March 2024, the two companies had issued more than 3.5 crore shares and convertible warrants to select persons and entities.

"A large part of the money paid for these allotments came from a small circle of connected persons, firms and lenders. Over the following months, the share prices were steadily pushed up, while the shares largely stayed in the same hands," the ED said in a statement, as per ANI.

It also said that between 2025 December and 2026 February, social communities which had names like “Multibagger Stocks” sent daily “buy” tips on these shares to retail investors.

"The groups ran on SIM cards obtained in the names of other persons in Haryana and Mumbai, but were operated from Bhavnagar, Gujarat. Drawn in by the tips, the number of buyers in the two scrips rose many times over, which pushed the prices up further," the ED revealed.

The ED also said that it appears that the scrip of a certain company was being promoted through these messaging groups in order to generate buying interest in the scrip, and this resulted in a significant price increase as well as increase in volumes of the script during the time when this scrip was being promoted on these groups.

"The Preferential allottees took advantage of this increased buying interest and dumped a part of their shareholding to a large number of investors," it said.

During the searches, ED identified clusters of family-linked beneficiaries of the scheme.

ED said its investigation revealed that these beneficiaries had acquired shares of the targeted scrips at low prices through preferential warrants. "The share prices were then pumped up through a systematic campaign run over various online channels," it said.

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