'Will the twain ever meet?': Godrej Consumer Products MD backs Dhaval Buch, says Rs 4 cr for consulting is...

Godrej Consumer Products MD & CEO Sudhir Sitapati has come out in strong support of Dhaval Buch, husband of Sebi Chairperson Madhabi Puri Buch, amid ongoing allegations of conflict of interest. 

Sitapati took to LinkedIn to weigh in on the controversy, calling it as a clash between the private and public sectors. "We may be witnessing the side effects of what happens when the worlds of government and the private sector collide," he wrote.

Dhaval and Madhabi Puri Buch have been under scrutiny following claims that Dhaval provided consultancy services to corporates while his wife led the Securities and Exchange Board of India (Sebi), raising questions about potential conflicts of interest. 

Sitapati, who worked closely with Dhaval during his 22 years at Hindustan Unilever (HUL), vouched for his character, saying, "In a company known for its integrity, his reputation for integrity stood out."

The controversy escalated when reports surfaced suggesting that Dhaval Buch earned Rs 4 crore for consulting assignments, prompting speculation about quid pro quo arrangements with companies regulated by Sebi. 

Sitapati defended Buch’s consulting career, pointing out that such compensation is not unusual in the private sector. "‘4 crore rupees’ for a consulting assignment seems scandalously suspicious in the government world but is par for the course in the private sector for someone as qualified as Dhaval," he stated.

Sitapati also emphasized the broader challenge this controversy reflects, particularly when private sector professionals transition into government roles. "Unless the context of top professionals coming from the corporate world is understood, we could have a situation where no senior person from the private sector would ever consider a government job," he warned. 

According to Sitapati, such a development would be a significant loss for India, especially as the country stands at the cusp of change and could greatly benefit from private sector expertise. "There is a lot of talent in the private sector that the government could use, and we probably need to reconsider our old socialist biases against everything private," he remarked.

He also highlighted the different operating principles in the two sectors. "In the private sector, the modus operandi is 'trust and declare'. Follow the spirit of the rules, and if you declare any potential conflict of interest, you are in the clear. In the government sector, you must follow the letter of the rules," Sitapati noted, explaining that even a hint of private sector engagement often invites suspicion in the public domain.

Sitapati’s defense touched on personal experiences, recalling how as a young management trainee at HUL, he earned more than his uncle, a Cabinet Secretary at the time. He noted how the disparity in salaries between private and public sectors can create misunderstandings. "The two worlds run on very different engines. Salaries, and hence assets, for one, are vastly different," he added.

The controversy stems from a series of allegations made by the Congress party, accusing Madhabi Puri Buch of financial impropriety, including receiving income from ICICI Bank post-retirement and earning rental income from Wockhardt Associates. They also accused Dhaval Buch and his companies—Agora Advisory in India and Agora Partners in Singapore—of profiting from consulting assignments, including a Rs 4.78 crore payment from the Mahindra Group while Sebi was investigating the company.

However, Madhabi Puri Buch has firmly rejected the allegations, asserting that she had made all necessary disclosures and adhered to recusal guidelines in any dealings with companies that had hired her husband. She called the claims “false, malicious, and motivated.”