How emergency funds meant to save jobs became personal compensation for the newly appointed CEO, Manpreet Ratia, while employees struggled to pay family bills.
In March 2025, Builder.ai announced the appointment of Manpreet Ratia as CEO. The company released termed this as “a strategic move aimed at driving the company’s next phase of growth, focusing on both innovation and operational excellence.”
Sachin Duggal, the previous CEO and founder of Builder.ai, was optimistic that Manpreet’s background and expertise would help the company achieve the perfect balance between innovation and operational efficiency. This optimism was grounded in over two years of collaboration, during which Manpreet had been working closely with Duggal across finance and strategy. Manpreet was also poised to formally join as CFO, having been performing the de facto CFO role for the previous two years.
However, three months later, at the beginning of June 2025, the AI powered software startup previously valued at $1.5 billion and backed by prominent investors including Microsoft, Softbank, Qatar Investment Authority (QIA), Insight Partners, IFC, and Iconiq Capital, filed for Chapter 7 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware, marking yet another startling scandal in the tech sector.
The Human Cost of Financial Engineering at the hands of Manpreet
Within weeks of Manpreet taking charge, the business reduced its global headcount to 270, from 770 as reported by the Financial Times. Yet he continued to draw his enhanced compensation package while employees struggled with delayed payments and mounting personal financial crises. He also continued to make public statements about it being a great business, with $100 million in cash collected and $160 million in revenues (Bloomberg and FT, March 31st).
The human impact was immediate and devastating. Employees found themselves unable to make child support payments, struggling to cover rent, and facing the humiliation of explaining to their families why their pay checks had stopped coming. Meanwhile, Ratia not only maintained his salary but had negotiated an advance payment and double compensation structure that insulated him from the financial chaos engulfing his workforce.
This created a two-tier system where one executive was protected while all the other employees bore the full brunt of the company’s financial difficulties. The contrast was stark: families missing mortgage payments while their new CEO secured an enhanced compensation package.
And the founder was the last person willing to give the company money!
The Emergency Loan Fraud
According to reporting by The Daily Telegraph, in May 2025, as the financial situation became critical, Manpreet approached founder Sachin Duggal for an urgent $300,000 loan. His pitch was compelling: the funds were needed to bridge a temporary gap, to keep the company operational while longer-term solutions were developed. He spoke of viable equity options and assured the founder that this would prevent any bankruptcy scenario from occurring.
What Manpreet didn’t disclose was that he had already developed a pre-pack insolvency strategy. The loan wasn’t intended to save the company; it was meant to fund the very process that would restructure it under new ownership.
Legal experts note that it’s a well-understood doctrine that borrowing money when the company is clearly going to be insolvent constitutes loan fraud, particularly when the borrower has knowledge of planned insolvency proceedings that the lender does not.
Sources close to the matter reveal that Duggal had no knowledge of the pre-pack strategy or the planned insolvency proceedings. The funds he provided, believing they would help pay employee salaries, were instead diverted to facilitate the very process that would eliminate many of those positions. Mr. Duggal declined to comment for this article.
The timing tells the story: a board member resigned the day after the founder wired the loan, suggesting that at least some insiders understood what was really happening. The day after that, a NewCo pre-pack plan was presented; from internal documents, the NewCo was meant to start from July, with funding from one of the existing investors.
Manpreet Makes Bank
Documents examined reveal that after the $300,000 was transferred by Duggal, Ratia instructed a transfer of $200,000 the very next day to his personal account. This wasn’t employee salary funding, it was personal compensation extracted from a last-minute loan that should have made sure all the employees got paid.
For employees still hoping their next paycheck would arrive, this revelation was devastating. The money they thought was coming to cover their paychecks was actually funding a process that would eliminate their jobs entirely.
The Town Hall Deception
Soon after taking over, during a company-wide town hall, Ratia claimed he had been offered $100 million in investment but had only taken $75 million, presenting this as a show of strength and principle. For employees listening to this presentation, many of whom would later struggle to pay their bills, the message was clear: their leader was making principled decisions that prioritised the company’s long-term health over short-term financial pressures.
If such an offer had existed and been accepted, the company would still be around today.
But the reality was that no such offer existed!
The AWS Decision starts a chain reaction
The financial engineering that ultimately led to the company’s destruction began with an irresponsible decision: signing off on an AWS payment plan in November 2024 that would breach the company’s cash covenants without seeking approval from the board. Internal records show the former CEO and founder, Duggal, asking who approved this payment plan, especially as it was the very one he had rejected a month earlier.
This decision triggered a cascade of financial problems that proved impossible to contain.
The Pattern of Self-Preservation
The evidence reveals a consistent pattern: while employees faced genuine hardship, Ratia protected his own financial interests through the use of the emergency funds for his personal use. This wasn’t crisis management; it was crisis exploitation.
While employees believed their leadership was working to save their jobs, the reality was that their positions were being systematically eliminated through financial manoeuvring.
Documents and recordings reveal that Manpreet also hid material facts from the board, lenders, and investors. One such liability was a settlement that he claimed he only discovered in late March, but records show he was on a video call discussing the liability in January. Sources close to the company said he hid this intentionally to secure loans from Insight Partners and QIA. This deception became one of the reasons that lender Viola swept the accounts, which directly led to the company’s collapse.
The contrast couldn’t be starker. Families struggling to make child support payments while their CEO secured $200,000 in personal compensation from emergency funds. Employees facing eviction while their leader negotiated enhanced salary packages. Workers wondering if their next paycheck would arrive while their CEO had already secured advance payments, all while concealing material liabilities from the very investors and lenders whose money was keeping the company afloat.
The Aftermath
As investigators piece together the collapse of what was once a $1.5 billion company, the human cost becomes clear. Hundreds of families affected, careers disrupted, and financial lives destroyed, all while those in positions of trust enriched themselves through the very crisis they helped create.
The hero complex that brought Manpreet Ratia to Builder.ai as a saviour became an ego complex that prioritised personal enrichment over employee welfare. The Manpreet as a white knight narrative was always a fiction; the evidence shows someone who used the situation to benefit himself while real families paid the ultimate price.
