SUMMARY
Cofounder Sachin Dev Duggal has been named as a suspect in an alleged money laundering case while another cofounder Saurabh Dhoot is in dock in connection with an alleged loan fraud case
Court documents accessed by FT showed that ED was probing transactions between 2008 and 2012 that “clearly indicated” that Videocon transferred funds to a company founded by Duggal in India
Both Duggal and Dhoot were the cofounders of London-based Builder.ai, a business that has been backed by a clutch of biggest tech investors, including Microsoft and SoftBank’s DeepCore AI-focused fund
The cofounders of AI-focussed startup Builder.ai have reportedly been booked by the Enforcement Directorate in connection with two separate criminal cases.
As per Financial Times, cofounder Sachin Dev Duggal has been named as a suspect in an alleged money laundering case while another cofounder Saurabh Dhoot is in the dock in connection with an alleged loan fraud case.
At the heart of the fracas involving Duggal is the ED’s money laundering probe into the now bankrupt electronics giant Videocon. In 2022, the agency is said to have issued summons to Duggal to appear before it as a witness in the probe into alleged “unexplained transactions” between his company (not Builder.ai) and Videocon.
Inc42 has reached out to Duggal for comments. The story will be updated based on the response.
Court documents accessed by FT showed that ED was probing transactions between 2008 and 2012 that “clearly indicated” that Videocon transferred funds to a company founded by Duggal in India. These proceeds were then allegedly transferred to Videocon’s overseas entities.
After Duggal failed to appear before the ED, the agency approached a Mumbai court for a “non-bailable warrant” against Duggal. The request was denied.
Afterwards in 2023, the directorate switched his designation from witness to “suspect” and approached Delhi HC with the same request. This time, the petition was approved.
Meanwhile, Duggal has reportedly appealed the warrant and has denied any wrongdoing. His lawyers told FT that the original court summons were invalid, adding that Duggal was still only a witness.
As per submissions by Duggal’s lawyers before the Delhi High Court accessed by FT, he argued that ED was “abusing its powers, provisions of law, in as much against a person who has been cooperating wholeheartedly with it”.
Both Duggal and Dhoot were the cofounders of London-based Builder.ai, a business that has been backed by a clutch of biggest tech investors, including Microsoft and SoftBank’s DeepCore AI-focused fund.
Floated in 2016, the business (erstwhile Engineer.ai), seeks to deploy artificial intelligence to make the process of building an app or website “as easy as ordering pizza”.
The duo met at university in the early 2000s where they became “best” friends, according to Duggal’s previous statements. They appeared to work closely during Builder.ai’s early days.
After the startup secured new funding in 2018, Duggal publicly thanked Dhoot following “the most defining week of our life” before thanking both their wives. Later, as the launch of OpenAI’s ChatGPT spawned a generative AI revolution, it seemed Builder.ai’s moment had come.
Last year, the startup announced a new $250 Mn funding round led by Qatar’s sovereign wealth fund, with participation from top US tech investors Insight Partners and Iconiq Capital.
Duggal, a British citizen, is Builder.ai’s chief executive who describes his role as “chief wizard”. He has become one of the most lauded entrepreneurs in London’s tech scene. EY named him the UK entrepreneur of the year in November 2023.
Earlier that same year, according to court documents, the Indian Directorate of Enforcement named Duggal as a suspect in a warrant application related to a money laundering investigation into Videocon.
Duggal’s personal blog and previous Indian media reports have stated that Duggal “co-founded” Nivio with Saurabh Dhoot in 2004.
However, lawyers for Builder.ai and its chief executive said Duggal founded Nivio’s parent company without Dhoot, and that Dhoot was given the title of co-founder in approximately 2007 or 2008 for support he had provided to Duggal.
Saurabh Dhoot’s lawyer also said he was not involved in setting up Nivio. Venugopal Dhoot’s lawyer said: “Mr Duggal or his companies in India have never transferred money to any Videocon company outside of India.”
The Videocon investigations do not relate to Builder.ai, but could raise questions over the startup’s leadership.
Lawyers for Builder.ai and Duggal said Saurabh Dhoot was also not involved in setting up the London-based tech start-up but had been designated co-founder in recognition of the friendship and advice he had provided to Duggal.
