Government Routed LIC Investments to Adani, The Washington Post Alleges

Funds Directed While Adani Faced Fraud and Bribery Charges in U.S., the Newspaper Claims

October 25, 2025

An investigative report by The Washington Post alleges that the Indian government directed $3.9 billion in public funds from the state-owned Life Insurance Corporation (LIC) into industrialist Gautam Adani’s companies at a time when global lenders were retreating due to fraud and bribery charges filed against him in the United States. The report presents this as an example of the convergence of crony capitalism, state-enabled financial support and elite consolidation within India’s current political economy.

According to the report, U.S. prosecutors had filed both criminal and civil charges against Adani and several associates, accusing them of misleading investors and bribing Indian officials to secure renewable energy contracts. Around the same period, India’s stock market regulator, SEBI, was investigating allegations of stock manipulation involving Adani Group entities. While SEBI dismissed some allegations, others reportedly remained under review. In this context of legal uncertainty and reputational concern, several international lenders reportedly became cautious. The Adani Group, facing tightened access to global capital, was seeking to refinance nearly $600 million in bonds for one of its subsidiaries.

The Washington Post report states that instead of adopting a cautious posture, the Indian government developed a financial support plan involving public institutions. LIC, which manages life insurance for over 250 million policyholders, was directed to invest about $3.9 billion in Adani Group companies. These investments, according to internal documents cited in the report, included bond purchases and equity stakes across sectors such as ports, cement, green energy, and power transmission.

The Post says it reviewed documents from the Department of Financial Services (DFS) and LIC, which suggest that the decision was not purely driven by market logic but was part of a structured plan to bolster investor confidence in the Adani Group. The plan was reportedly formulated in coordination with India’s policy think tank, NITI Aayog, and approved by the Finance Ministry.

If accurate, the coordination between these public bodies could indicate a high level of state involvement in the financial reinforcement of a single private conglomerate. According to analysts cited in the report, this reflects a political economy in which state resources are increasingly mobilised to support specific business interests perceived as aligned with government objectives.

According to The Post, officials cited in the internal documents justified the investment plan by pointing to the central role of Adani Group companies in India’s infrastructure development. They noted that the conglomerate’s ports division manages over a quarter of the country’s cargo, and its energy firms are significant players in both coal-based and renewable power generation. The report suggests that this line of reasoning reflects a larger trend in which state authorities view certain private companies as essential to national objectives. Such a perspective may invite scrutiny over whether the government’s financial decisions are being made independently or are increasingly influenced by ties to politically influential business interests.

The LIC investments attracted public criticism, particularly in light of earlier losses. According to DFS documents referred to in the report, LIC’s bond holdings in Adani companies had suffered declines after the Hindenburg Research report in 2023, though some of the value had recovered by March 2024. Despite the volatility, the documents reportedly show officials recommending that LIC increase its exposure to Adani Group’s debt and equity.

The Post report argues that such decisions appear inconsistent with LIC’s core mandate to protect long-term savings, particularly for low- and middle-income policyholders. Moreover, the report characterises this as an example of public institutions being drawn into decisions that primarily serve the financial interests of a politically connected industrialist.

The idea of state-supported “national champions” has long been part of industrial strategy in many countries, including China, France, South Korea, Russia and Brazil, where governments have backed select corporations to lead in key sectors such as energy, defence, telecommunications and heavy industry. The Adani Group, according to the Post, has increasingly come to occupy this role in India’s strategic sectors.

The consequences, according to commentators in the report, include not only financial exposure but also concerns about media independence. The report cites the group’s 2022 acquisition of the news channel NDTV as an example of growing corporate influence in the media landscape, with implications for press independence.

If the internal documents are accurate and the investments happened as reported, it would mean that instead of acting as independent regulators and protectors of public money, public institutions are now being used to support the interests of certain private companies. This calls into question whether these institutions continue to serve the public interest, how they are held accountable and what effect such government-directed funding might have on the long-term functioning of democracy.

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