India's Directorate of Enforcement has filed a criminal complaint in a New Delhi court naming Sachin Dev Duggal, founder of collapsed AI startup Builder.ai, as "the key beneficiary" of an alleged money-laundering scheme tied to defunct electronics conglomerate Videocon.

The complaint centres on Duggal's earlier venture, cloud computing company Nivio, rather than Builder.ai itself. Authorities allege that Videocon began advancing interest-free loans to Nivio's Indian arm without any formal loan agreement. A contract was eventually signed in May 2011, and the very next day an overseas Videocon entity transferred SFr 3.7m into Duggal's Swiss holding company, nHoldings SA, at what the agency describes as a heavily inflated valuation, despite the firm being loss-making at the time. Over the following three years, a further $3.7m was allegedly routed to nHoldings and to Duggal personally through a five-step offshore chain.

Duggal was first linked to this probe in March 2024. A representative told the Financial Times the complaint regarding Nivio could not be addressed until it was heard by a judge.

Builder.ai's wider troubles

Builder.ai was founded in 2016 with a pitch to simplify app and website development using AI, eventually raising more than $500m from backers including SoftBank and Microsoft. Duggal served as chief executive and later took the title of "chief wizard officer" before the company entered insolvency in May 2025, following allegations of inflated sales and revenue forecasts. Both Duggal and the company had previously denied any misreporting.

The enforcement complaint adds to a growing list of legal pressures surrounding the startup and its founder. Separately, US prosecutors last year ordered Builder.ai to hand over internal data, including customer lists and accounting policies, with the FBI reportedly involved in that request. The status of that American investigation remains unclear.

In September 2025, Sifted reported that Duggal had briefed investors on a new AI venture, said to be called SecondBrain, suggesting he intends to remain active in the sector despite the legal proceedings.

What this signals

The Builder.ai collapse has become one of the more instructive cautionary tales in European AI funding. The company attracted substantial capital from marquee investors on the strength of AI-assisted development claims that were later called into question. The enforcement action in India, which predates the insolvency by more than a year, raises questions about the due diligence processes applied to founder backgrounds at the growth stage.

For the broader AI startup ecosystem, the case is a reminder that regulatory scrutiny of founders is not confined to product claims or data practices. Financial histories, prior ventures, and cross-border corporate structures are increasingly in scope, particularly as enforcement agencies in multiple jurisdictions coordinate more closely.

The New Delhi complaint is yet to be heard by a judge. How the court proceeds will determine whether Duggal faces formal charges under India's Prevention of Money Laundering Act.