LIC Denies Government Role in $3.9 Billion Adani Investments
The Washington Post Report Alleges State-Directed Support, But LIC Calls Claims False
October 26, 2025
The Life Insurance Corporation of India (LIC) has rejected allegations made by The Washington Post that its investment decisions, specifically a $3.9 billion infusion into companies owned by industrialist Gautam Adani, as reported by the newspaper, were directed by the Indian government. What remains unanswered is whether LIC considered the legal and financial risks associated with Adani Group at the time, and how it justified increasing its exposure despite market volatility and public criticism.
In a public rebuttal, posted on X on Oct. 25, the state-owned insurer called the claims “false, baseless, and far from the truth,” and stated that its investments are independently governed and executed under board-approved policies, with no influence from government ministries or outside agencies.
The Washington Post’s investigative report claims that the Indian government put together a financial support plan for the Adani Group at a time when global investors were pulling back due to serious legal and regulatory issues. The report is based on internal documents said to be from the Department of Financial Services (DFS) and LIC, and describes how LIC, which manages policies for over 250 million Indians, was allegedly used to financially support the Adani Group.
The DFS is a wing of the Union Ministry of Finance that oversees the functioning of financial institutions, including public sector banks, insurance companies and financial regulators. As LIC is a government-owned insurer, the DFS plays an administrative role in matters of governance and policy oversight.
According to the Post, U.S. prosecutors had filed criminal and civil charges against Adani and several associates, accusing them of misleading investors and bribing Indian officials in connection with renewable energy contracts. Concurrently, the Securities and Exchange Board of India (SEBI) was investigating allegations of stock manipulation involving Adani entities. In this climate of global scepticism, where international lenders were reportedly withdrawing, the report claims Indian authorities formulated a plan to redirect domestic public funds to stabilise the Adani Group’s financial position.
The documents reviewed by the Post allegedly show that LIC was instructed to invest heavily in Adani’s debt and equity instruments. The plan, the report says, was devised in coordination with India’s policy think tank NITI Aayog and approved by the Finance Ministry. These investments, the report argues, deviated from market logic and instead reflect a state strategy to back “national champions” aligned with governmental infrastructure goals.
LIC’s rebuttal categorically denies the existence of any such roadmap or directive. “No such document or plan as alleged in the article has ever been prepared by LIC,” the statement said, adding that its investment decisions follow rigorous due diligence processes and comply with regulatory frameworks and internal policies. “The Department of Financial Services or any other body does not have any role in such decisions,” LIC asserted, calling the report an attempt to “tarnish the reputation and image of LIC and the strong financial sector foundations in India.”
The Adani Group has also rejected any “government plans” or “preferential treatment” by the LIC in the investment in its bonds, as reported by India Today.
However, the rebuttal leaves at least one critical question unresolved. It does not address whether there were internal discussions within LIC concerning the timing, risk and political sensitivities of the Adani investments, particularly given the reputational concerns after the 2023 Hindenburg Research report, which had accused the Adani Group of accounting irregularities and stock manipulation.
While the LIC statement affirms that investments were made “in the best interest of all its stakeholders,” it does not explain how increasing exposure to a financially and legally embattled conglomerate served those interests, particularly for LIC’s predominantly small and middle-income policyholders.
The allegations involve matters of public interest, including how a state-owned institution manages funds entrusted by millions of policyholders. At issue is whether LIC acted independently or in line with political objectives. Given the scale of the investments and the nature of the claims, it remains to be seen whether any government regulator, like IRDAI (Insurance Regulatory and Development Authority of India) and SEBI, will examine LIC’s decisions or the processes behind them.
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