A fresh controversy has erupted after The Washington Post published an investigation alleging that India’s Ministry of Finance and other senior officials drafted a plan to funnel ₹32,000 crore ($3.9 billion) from Life Insurance Corporation (LIC) of India into the Adani Group in May 2025—despite considerable “financial risks” flagged in internal documents. The investigation claims to have reviewed internal government and LIC documents, and includes interviews with officials and bankers familiar with the matter.
What the Report Claims
According to the report, officials with the Department of Financial Services (DFS), Niti Aayog, and LIC coordinated and fast-tracked the process, culminating in a significant Life Insurance Corporation investment in a bond issue from Adani Ports & SEZ—one in which LIC’s alone participation raised opposition complaints of a “bailout.” The report says this action was intended to signal confidence in Adani Group, whose companies were still under scrutiny after the 2023 Hindenburg allegations, and to “encourage participation from other investors.” The documents, The Post says, acknowledged the move’s risk, noting that Adani securities were “sensitive to controversies.”
The Post’s article surfaced amid persistent attention on LIC’s stakes in several Adani companies—debates ignited by the 2023 Hindenburg report, which accused the conglomerate of stock manipulation and accounting irregularities, causing a sharp crash across Adani’s share prices and wiping billions in market value. Although LIC’s exposure to Adani firms remains below 2% of the group’s total debt, critics continue to question the wisdom and transparency of such investment strategies, especially when they are seen as politically influenced.
LIC, Adani Group, and Govt Reply: Denial and Defense
It promptly issued a strong rebuttal, calling the Washington Post’s charges “baseless, false, and far from truth.” In its official statement, LIC asserted that all investments are made independently, driven by strict internal due diligence and in line with regulatory guidelines. The insurer refuted the existence of any such government-mandated document and warned the media against attempts to “tarnish” its image. The Indian government echoed these denials, with officials stating that they had not written to Life Insurance Corporation or prepared any such proposal, and emphasized that investment decisions by Life Insurance Corporation are not subject to government interference.
The Adani Group also rejected the allegations, reiterating that its financial operations are sound and in line with all laws. LIC, for its part, underscored that investments in Adani companies have historically provided strong returns for policyholders and remain within regulatory limits.
Political Fallout: Opposition Demands Probe, Focus Returns to Hindenburg Saga
The controversy quickly triggered political heat. The Congress party and opposition leaders seized upon the Washington Post’s findings to allege that public sector resources—including the life savings of 30 crore LIC policyholders—were “misused” to shore up the Adani Group. They demanded a probe by the Parliament’s Public Accounts Committee and called for greater transparency and oversight around large institutional investments in politically-connected conglomerates.
This is not the first time Life Insurance Corporation’s finances, Adani’s political links, and government decisions have collided. The January 2023 Hindenburg Research report led to $150 billion in lost value for the Adani Group and severe reputational blows. While the Supreme Court-ordered SEBI inquiry found no regulatory breaches in August 2025 and cleared the Adani Group of stock price manipulation, questions about transparency, institutional independence, and government-corporate relationships remain hotly debated.
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Context and Next Steps
The entire saga underlines persistent concerns about the intersection of state power, financial regulation, and billionaire-led business houses in India. With American investors increasing exposure to Adani assets even as domestic media and opposition keep up the pressure, the spotlight on LIC’s portfolio—and its insulation from potential political directives—remains intense.
