Almost every reputable seller of ghee that I can find online claims that ghee contains no oxidized cholesterol.

Here is a quote from MAPI's ghee page:

Ghee imparts the benefits of the best essential fatty acids without the problems of oxidized cholesterol, transfatty acids or hydrogenated fats. It is also resistant to free radical damage and is both salt and lactose free.

However, several western doctors or scientists make the opposite claim. Who is right?

I'm having trouble finding good quality research papers that provide a definitive answer. If anyone has some good references, please let me know.

I do know of one report by Marc S. Jacobsen in the September 19, 1987 issue of the Lancet on pages 656-658. Ghee was found to contain about 12.3% of all sterols in the form of cholesterol oxides. That's bad news. [Update: it is also not true.] Jacobsen attributed the high morbidity and mortality from coronary heart disease of Asian Indians living in the London area to consumption of ghee containing these angiotoxic oxidized sterols.

However, that conclusion does not make sense because CHD was relatively unknown in India until around 50-60 years ago in spite of high consumption of ghee. Furthermore, ghee is revered in ayurveda, and there is a very strong trend where modern science confirms the ayurvedic practices it investigates. (This is similar to what happens when it investigates oriential medicine practices such as acupuncture.) I suspect that further research would lend further support for the ayurvedic view on ghee. However, in the mean time, I really want a definitive answer on the oxidized cholesterol question and Jacobsen's old report in the Lancet doesn't satisfy me.

I also want to point out that not all ghee is created equal. Some resembles butter in that it is semi solid at room temperature. Other ghee is a golden liquid at room temperature like a vegetable oil.

UPDATE : I'll add a personal note. I did an experiment of sorts. Soon after my physician performed my annual physical exam, complete with blood work, I added ghee to my diet. I typically ate 2 tbsp of ghee per day for a year. After a year of doing this, all measures of my cardiac health improved. My total and LDL cholesterol both went down. In the physical at the end of that year, the cardiologist was so impressed he declared I would never have heart trouble. He indicated I was one of the most exceptionally healthy patients he had seen.

Of course, this does not represent a rigorous scientific experiment. But it does indicate that eating ghee every day has been good for my heart. My pre-ghee diet was very healthy by almost any standards. Most people (but not me) would consider my diet with ghee to be slightly less healthy -- although it is still very healthy. For example, I eat organic fruits and veggies, no processed foods, I rarely eat at restaurants, etc. On the pre-ghee diet, I occasionally ate organic eggs, but on the ghee-included diet I replaced the eggs with whole milk almost every day. By the way, I lost a little weight on the ghee plus whole milk diet, even though my fat intake went up and my exercise stayed the same. As you can see, several variables changed, so I can't make any concrete claims -- except that all measurements of my heart health (including two EKG's, an exercise stress test, blood work and full cardiologist exam) pronounced my heart in tip top shape after the year of eating ghee almost every day.

UPDATE 2 : I found a reliable-looking quantitative answer here to the question, "Does ghee contain oxidized cholesterol?"