Friends turn foes? Adi Godrej accuses former MD of legal breach over plans to launch competing products

It is unlikely for Adi Godrej, the chairman of Godrej group, to wash his dirty linen in public, but the world saw him in a fierce mood when he publicly accused former employee and business partner Arumugham Mahendran of ethical and legal breach. He said that Mahendran was planning to launch new products that will be in direct competition with popular Godrej brands Good Knight and Hit.

Mahendran had worked closely with Godrej for over 15 years, being the MD of the Rs 9,000-crore Godrej Consumer Products (GCPL) before he left the group in 2013 with an aim to start his own business. He also held some shares in at least four Godrej group companies.

"I am extremely disappointed with Mahendran," Godrej told ET. "Him launching household insecticides is both a serious ethical and legal breach."

While accusing Mahendran, Godrej also spoke about his surprise over Goldman Sachs, the investor backing Mahendran's venture.

"I am also very surprised that global investors like Goldman Sachs are allowing this to happen under their watch," he said.

Mahendran, on the other hand, maintained that he was under no contract to not enter the insecticide business. "In spite of my not having a non-compete agreement with Godrej, it was on ethical grounds I chose not to enter the insecticide business for three years," Mahendran said. "I hold Mr Godrej and the family in high esteem and am very surprised to hear their comments," he added.

Mahendran is busy launching insecticides under the brand name DND through his new venture Global Consumer Products, which is backed by Goldman Sachs. He would be controlling 20% of Global Consumer Products along with his family while the rest would be held by Goldman Sachs and Japanese investor Mitsui.