The Life Insurance Corporation of India on Saturday rejected a report by The Washington Post that said that the public sector company invested nearly $3.9 billion in industrialist Gautam Adani’s Adani Group following directions from the Union government.

“The allegations levelled by The Washington Post that the investment decisions of LIC are influenced by external factors are false, baseless, and far from truth,” stated the state-owned insurance and investment firm.

In a report published on Friday, The Washington Post claimed that the Union government had directed nearly $3.9 billion, or about Rs 33,000 crore, in investments from LIC India into the Adani Group at a time when the industrialist’s businesses were facing financial and legal challenges.

The Union government had also drafted and pushed through a proposal in May to divert the amount in investments from LIC India to support the conglomerate, The Washington Post alleged.

The Adani Group categorically denied involvement in “any alleged government plans” to direct LIC India funds, according to the newspaper.

“LIC invests across multiple corporate groups – and suggesting preferential treatment for Adani is misleading,” the conglomerate said in response to questions from The Washington Post. “Moreover, LIC has earned returns from its exposure to our portfolio.”

The company also said that “assertions of undue political favour are unfounded”, adding that its growth predated “[Prime Minister Narendra] Mr Modi’s national leadership”.

LIC India, in its statement on Saturday, claimed that no document or plan mentioned by The Washington Post had “ever been prepared” by it.

The firm also stated that its investment decisions were taken “independently as per board-approved policies after detailed due diligence”.

It added that no government body had any role in its investment process.

“LIC has ensured highest standards of due diligence and all its investment decisions have been undertaken in compliance with extant policies, provisions in the Acts and regulatory guidelines, in the best interest of all its stakeholders,” the statement read.

The Washington Post report

In its report, The Washington Post claimed that it had obtained internal documents showing how the Union Ministry of Finance fast-tracked a proposal in May to direct nearly $3.9 billion in investments from LIC India to the Adani Group despite being aware of the risks.

The investments came at a time when the conglomerate needed funds to refinance its dollar debt obligations, the report claimed

In 2024, a United States court indicted Adani for his alleged role in a $265 million, or nearly Rs 2,236 crore, bribery and fraud scheme related to solar projects in India. The indictment had led to reluctance among global banks and financial institutions to extend loans to the conglomerate.

On May 30, Adani Ports and Special Economic Zone Limited, which is part of Adani Group, also announced that it had raised Rs 5,000 crore through a 15-year non-convertible debenture. This had been financed by LIC India.

A non-convertible debenture is a long-term debt instrument that companies use to raise capital.

The Washington Post claimed that the Union Finance Ministry had proposed that LIC India spread out its $3.4 billion bond investments into Adani Ports and Special Economic Zone and Adani Green Energy Limited, as it offered higher returns than 10-year government securities.

LIC India had also requested the facilitation of “a swift review and approval process” as the investments were “time-sensitive”, the report claimed.

The report claimed that officials at the Department of Financial Services, a department under the Union Finance Ministry responsible for overseeing the financial sector, working in coordination with LIC India and NITI Aayog, developed the investment plan that had been approved in May.

Funds from LIC ‘systematically misused’: Congress

The Congress on Saturday used The Washington Post report to allege that the savings from LIC India’s 30 crore policyholders had been “systematically misused” to benefit the Adani Group.

In a statement, Congress MP Jairam Ramesh urged the Parliament’s Public Accounts Committee to investigate how LIC India was “forced” to make investments in the conglomerate.

“The question arises: under whose pressure did the officials of the Ministry of Finance and NITI Aayog decide that their job was to bail out a private company facing funding difficulties due to serious allegations of criminality?” he asked. “Is this not a textbook case of ‘mobile phone banking’?”.

The Congress MP also claimed that the cost of “throwing public money at crony firms” became clear when LIC India suffered “a staggering Rs 7,850 crore loss” in four hours of trading on September 21, 2024, after the US court indicted Adani for his alleged role in a $265 million bribery and fraud scheme related to his solar projects in India.

“Adani has been accused of orchestrating a Rs 2,000 crore bribery scheme to secure high-priced solar power contracts in India,” Ramesh said. “The Modi government has refused, for nearly a year, to serve a US SEC summons to the prime minister’s most favoured business conglomerate.”

In August, the United States Securities and Exchange Commission told the district court in New York that India was yet to deliver summons to Adani in the alleged scheme.

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