LIC–ADANI INVESTMENT CONTROVERSY

LIC–ADANI INVESTMENT CONTROVERSY

The LIC–Adani investment issue emerged after a Washington Post investigation alleged that the Government of India, through internal notes of the Department of Financial Services and NITI Aayog, prepared a roadmap in May 2025 to channel nearly USD 3.9 billion (₹33,000 crore) of LIC’s funds into Adani Group companies. The alleged proposal involved USD 3.4 billion in corporate bonds and USD 507 million in equity, at a time when the conglomerate required refinancing support. The report claimed that officials justified the move by arguing that government bonds offered “limited upside” compared to Adani bonds with yields of 7.5–8.2%.

Investment analysts cited in the investigation termed the proposed exposure “abnormal” for a public insurer like LIC, emphasizing that concentrated investment in a single business group increased systemic and policyholder risk. The report also hinted at external influence on LIC’s autonomy, thereby raising questions of regulatory independence, due diligence, and fiduciary prudence.

LIC issued a detailed rebuttal, stating that no such directive existed and that all investments follow a transparent, board-approved, rule-based process subjected to internal investment committees, statutory auditors, and IRDAI supervision. LIC emphasized that its investment disclosures under the Insurance Act, 1938 and IRDAI Investment Regulations demonstrate accountability and adherence to norms.