ED Freezes ₹200 Crore in Trading Accounts Amid Raids in Maharashtra and Gujarat
The Enforcement Directorate has frozen ₹200 crore linked to a share manipulation scheme during extensive searches across 29 locations.
Raids conducted on October 16 across Maharashtra and Gujarat.
Investigation focuses on alleged 'pump and dump' share manipulation involving two companies.
ED seized incriminating documents and identified family-linked beneficiaries.
The Enforcement Directorate (ED) has announced the freezing of ₹200 crore in trading accounts as part of an investigation into a suspected share manipulation scheme. This action follows extensive raids conducted on October 16 at 29 locations in Maharashtra and Gujarat, including major cities like Mumbai, Nashik, Ahmedabad, and Surat.
The raids were executed under the Prevention of Money Laundering Act (PMLA) of 2002, targeting the alleged manipulation of shares of listed companies. During these operations, the ED seized a variety of incriminating materials, including documents, digital devices, and records related to share transactions. The premises searched included corporate offices, residences of company promoters, and locations associated with stock-broking firms.
According to the ED, the investigation revealed that between April 2023 and March 2024, two companies issued over 3.5 crore shares and convertible warrants to selected individuals and entities. The agency noted that a significant portion of the funds used for these transactions originated from a small network of connected individuals and firms. Following these allotments, the share prices were artificially inflated while remaining largely within the same group of investors.
The ED's findings indicate that social media groups, such as “Multibagger Stocks,” disseminated daily buying tips to retail investors, significantly increasing interest in the shares. These groups operated using SIM cards registered under different names in Haryana and Mumbai, but were managed from Bhavnagar, Gujarat. This orchestrated promotion led to a substantial rise in the number of buyers, further driving up share prices.
The investigation has also uncovered clusters of beneficiaries linked by family ties who acquired shares at preferential rates. The ED asserts that these beneficiaries exploited the heightened buying interest to sell off portions of their holdings to unsuspecting investors. The agency continues to probe the extent of the manipulation and the connections among the involved parties.
