A Washington Post investigation has uncovered that Indian government officials drafted and approved a $3.9 billion plan to direct taxpayer-backed investments from Life Insurance Corporation of India (LIC) into companies owned by billionaire Gautam Adani, raising serious questions about the use of public funds to support politically connected conglomerates.
The plan was conceived in May 2025 as Adani’s debt-laden conglomerate faced mounting repayment pressure, according to internal documents obtained by Washington Post reporters Pranshu Verma and Ravi Nair.
Adani Investment Plan Breakdown
| Investment Details | Amount (USD) |
|---|---|
| Adani Corporate Bonds | $3.4 billion |
| Equity Stakes Increase | $507 million |
| Total Investment | $3.9 billion |
| First Bond Issue (APSEZ) | $585 million (Rs 5,000 crore) |
| Bond Yield | 8.2% |
| Govt Securities Yield | 7.2% |
The Coordination Behind Closed Doors
The strategy was coordinated by officials from the Department of Financial Services (DFS), the Ministry of Finance (MoF), LIC, and government think tank NITI Aayog. The stated objectives? To signal confidence in the Adani Group and encourage participation from other investors, even as global lenders grew cautious following US legal charges against the industrialist.
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Swift Execution Raises Eyebrows
On May 30, 2025, Adani Ports and Special Economic Zone (APSEZ) announced a Rs 5,000 crore bond issue to refinance existing debt. The entire issue was subscribed by a single investor—LIC—a move that immediately drew political backlash.
Corporate finance expert Hemindra Hazari called the situation “abnormal,” noting that LIC provides life insurance largely to poor and rural citizens, making such concentrated investments in a private company questionable.
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The Adani Legal Storm
Gautam Adani, India’s second-richest man with an estimated net worth of $90 billion, was charged in 2024 by the US Department of Justice with running a “multi-billion-dollar scheme” that allegedly misled investors and involved over $250 million in bribes to win energy contracts.
The US Securities and Exchange Commission also brought civil fraud charges against Adani and his nephew, Sagar Adani. The Adani Group has categorically denied all allegations, calling them “baseless” and “politically motivated.”
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Previous Controversies Amplify Concerns
This isn’t the first time Adani’s empire has faced scrutiny. In 2023, Hindenburg Research accused the Adani Group of accounting fraud and stock price manipulation, triggering a sharp selloff that wiped out billions in market value.
LIC’s own holdings in Adani companies had lost about $5.6 billion in paper value at the time, though some losses were later recovered. While India’s market regulator SEBI dismissed two allegations, other inquiries remain open.
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Critics Cry “Crony Capitalism”
Analysts quoted in the Washington Post investigation describe the episode as textbook crony capitalism. Tim Buckley, director of Climate Energy Finance, stated: “Adani is allowed to operate by a different set of rules. Crony capitalism is alive and kicking”.
Opposition parties including Congress and CPI(M) have long accused the Modi government of misusing LIC funds to favor Adani, claims that have gained traction following this revelation.
The Government’s Rationale
Finance ministry officials argued that Adani’s bonds offered higher returns—up to 8.2%—than 10-year government securities, which yielded around 7.2%. DFS documents described Adani as a “visionary entrepreneur” who had shown “remarkable resilience.”
Government officials viewed his ports, energy, and infrastructure companies as vital to India’s development objectives, despite ongoing legal challenges and financial volatility.
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Adani Group’s Response
The Adani Group categorically denied involvement in any alleged government plans to direct LIC funds, stating that LIC invests across multiple corporate groups and has earned returns from its exposure to Adani companies. The conglomerate asserted that “assertions of undue political favor are unfounded” and that its “growth predates Mr. Modi’s national leadership.”
Notably, LIC, DFS, and the Prime Minister’s Office did not respond to Washington Post’s requests for comment.
What’s at Stake for Indian Taxpayers?
LIC, a state-owned insurer that manages the savings of millions of low- and middle-income Indians, being used to stabilize a billionaire’s debt-heavy empire raises fundamental questions about fiduciary responsibility and the appropriate use of public funds.
Hazari warned: “If anything happens to LIC, it is only the government that can bail it out”—ultimately placing the risk squarely on taxpayers.
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FAQs
Q1: How much money was planned to be invested from LIC into Adani companies?
According to the Washington Post investigation, Indian government officials approved a $3.9 billion plan, with approximately $3.4 billion allocated to Adani Group corporate bonds and another $507 million to increase equity stakes in subsidiaries including Adani Green Energy and Ambuja Cements. The first tranche was executed on May 30, 2025, when LIC subscribed to the entire $585 million APSEZ bond issue.
Q2: What legal troubles is Gautam Adani facing?
Gautam Adani was charged in 2024 by the US Department of Justice with allegedly running a multi-billion-dollar scheme involving misleading investors and over $250 million in bribes to win energy contracts. The US SEC also brought civil fraud charges against him and his nephew. Additionally, in 2023, Hindenburg Research accused the Adani Group of accounting fraud and stock manipulation. The Adani Group has denied all allegations, calling them baseless and politically motivated.
