A Washington Post investigation has alleged that Indian officials quietly channelled nearly $3.9 billion from the state-run Life Insurance Corporation of India (LIC) into Gautam Adani’s companies, even as the billionaire faced bribery and fraud charges in the United States. The report has reignited debate over crony capitalism, transparency in public finance, and the blurred lines between state policy and private business interests.
The Alleged Plan
Based on documents quoted by The Washington Post, DFS officials and NITI Aayog officials, in collaboration with the Finance Ministry, had prepared a proposal in May 2025 to guide LIC investments into Adani Group equities and bonds.
Among the objectives mentioned were “signaling confidence in Adani Group” and “encouraging participation from other investors.”
In May, LIC pumped $585 million into Adani Ports’ bond sale, taking the entire tranche, as the group struggled with debt and foreign lenders hesitated.
Government Silence, LIC Denial
The Finance Ministry, as well as NITI Aayog or the Prime Minister’s Office, declined to comment to The Washington Post.
But on Saturday, LIC had an official denial, terming the reports “false, baseless, and far from truth.
“No such plan or document as has been claimed in the article has ever been drawn up by LIC into Adani Group of companies,”
LIC wrote on X (formerly Twitter), and asserted that every investment was made “independently, with integrity and due diligence.”
Adani Group’s Response
Adani Group informed The Washington Post that it had “categorically denied” the U.S. accusations and brushed aside allegations of political favoritism.
“LIC invests across multiple corporate groups — suggesting preferential treatment for Adani is misleading. Moreover, LIC has earned returns from its exposure to our portfolio,”
the company said.
Opposition Reactions
The revelation triggered sharp criticism from opposition parties.
Congress leader Rahul Gandhi accused the government of diverting citizens’ premiums to aid its corporate ally, posting on X:
“पैसा, पॉलिसी, प्रीमियम आपका — फायदा अडानी का!”
(“Money, policy, and premium are yours; benefit is Adani’s.”)
The CPI(M) along with other parties described the LIC–Adani nexus as “a misuse of public money” and “a textbook case of state-sponsored crony capitalism.”
The U.S. Legal Cloud
Adani, his nephew Sagar Adani, and six colleagues were indicted in 2024 by the U.S. Department of Justice on charges that they orchestrated a multi-billion-dollar fraud and bribery racket to secure solar energy contracts in India. The Securities and Exchange Commission (SEC) also brought parallel civil charges the same day.
The Adani Group maintains the cases are “individuals, not the company.
The US legal woes spooked international lenders, prompting Adani to turn increasingly to local funding sources — a move analysts say highlights the state’s protective attitude towards India’s second-wealthiest man.
The Broader Picture
The LIC–Adani scandal is timely for India’s financial market. The country’s largest insurer, LIC, with 250 million plus policyholders’ savings to protect, is charged with investing conservatively. It is unclear whether a highly leveraged, internationally investigated conglomerate is in keeping with that mission.
State officials defended the action as helping “India’s economic goals” and yielding higher returns — 7.5–8.2% — than the government 7.2% securities.
But as Hazari warned, “If anything goes wrong with LIC, it’s the taxpayer who will have to bail it out.”
Public Backlash and Policy Implications
The charges have reignited a familiar controversy over centralization of corporate power, political patronage, and undermining regulatory autonomy.
For critics, the incident represents the increasing convergence of political aspiration and private money.
For the government and its defenders, it is an expression of strategic faith in local industrial champions amid economic gloom abroad.
At present, both the U.S. Justice Department case against Adani Group and the SEBI investigations are still pending. The investments of LIC are still under public and parliamentary scrutiny.
Although the insurer and Adani Group argue that all of the transactions were legitimate and well-timed, the political cost is yet to fully materialize.
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