LIC Dismisses Washington Post Report Alleging $3.9 Billion Investment in Adani Group

The Washington Post reported on 25 October that Indian officials allegedly droughted and approved a plan in May to redirect approximately $3.9 billion in investments from the state-owned insurer to Adani Group enterprises. The Life Insurance Corporation of India (LIC) refuted the claims.

The claims were deemed "false" by LIC. In a statement, LIC said that the alleged remarks in the article seemed to have been made with the objective to "tarnish the reputation and image" of LIC and the solid financial sector foundations in India, as well as to "prejudice" the company's established decision-making process.

According to LIC's official response, the Washington Post's accusations that LIC's investment selections are impacted by outside forces are untrue, unfounded, and far from accurate. The report claims that LIC has never created a plan or document that lays out a strategy for LIC to invest money in the Adani group of firms.

Investment was Made as per Board Approved Policy: LIC

The group stated that LIC independently makes investment decisions in accordance with board-approved regulations following thorough due diligence. Such judgements are not made by the Department of Financial Services or any other organisation.

According to LIC, it has made sure that the "highest standards of due diligence" have been followed and that all of its investment decisions have been made in the best interests of all of its stakeholders by adhering to current policies, act provisions, and regulatory requirements. The $570 million LIC investment in Adani Ports & SEZ (APSEZ), which has the highest 'AAA' credit rating in India, was also highlighted in the report.

The Adani Group was under investigation and dealing with a mountain of debt at the time in the United States. LIC also has a sizable amount of corporate debt and government bonds. It spreads risk through a broadly diversified portfolio.

Less than 2% of LIC's total debt is held by the Adani group, which is led by Gautam Adani, the second-richest man in India. Global confidence in the firm is shown in the recent investments made in Adani debt by international investors such as Germany's second-biggest bank, DZ Bank, and Japan's major banks, Mizuho and MUFG, as well as the US's largest funds, BlackRock and Apollo.

Response from Adani Group

In reaction to the Washington Post article, the Adani Group stated that it vehemently denies any role in any purported government schemes to allocate LIC funding. The organisation also disclosed that LIC makes investments in a variety of corporate companies; therefore, it is false to imply that Adani receives preferential treatment. Additionally, LIC has profited from its investment in our portfolio. The business stated that "our growth predates PM Modi's national leadership" and that claims of excessive political favour are baseless.