Opposition parties on Saturday accused the Centre of squandering taxpayers’ money and demanded a probe after The Washington Post reported that the Narendra Modi government had got the Life Insurance Corporation of India to invest around $3.9 billion in Adani companies in May.

The Adani group and the LIC have denied any wrongdoing.

Opposition parties have since 2023 questioned the investments that the public-sector LIC and the State Bank of India had made in the Adani group, particularly after a Hindenburg Research report alleged stock manipulation and accounting fraud by
the conglomerate.

This has led to multiple disruptions of Parliament, with the Centre refusing to allow any probe or discussion on the corporate house, which the Congress has dubbed “the Prime Minister’s most favoured business conglomerate”.

The Post said it had accessed internal documents of the Union department of financial services (DFS), Niti Aayog and the LIC and concluded that: “Indian officials drafted and pushed through a proposal in May to steer roughly $3.9 billion in investments to Adani’s businesses from the Life Insurance Corporation of India….

“LIC, which had purchased stakes in several Adani companies before the scandals (of alleged stock manipulation in 2023), was advised by Indian Finance Ministry officials to invest roughly $3.4 billion in corporate bonds issued by Adani Group and use an additional estimated $507 million to significantly increase its stakes in several subsidiaries, the documents show.”

The report added: “But the DFS documents acknowledged that the proposed investment strategy came with risks. ‘Adani’s securities are sensitive to controversies… causing short-term price fluctuations,’ one document said.

“It noted LIC lost roughly $5.6 billion in gains on paper after the 2023 Hindenburg report, with its investment value falling to roughly $3 billion by February 2023. The value of LIC’s holdings recovered to $6.9 billion by March 2024, the document said — meaning losses had not been fully recouped at that time.”

The report recalled that last year, “In a five-count indictment, prosecutors alleged that Adani and his associates raised billions of dollars ‘on the basis of false statements’ while bribing Indian officials with more than $250 million in payments to win solar power contracts….

“Major American and other Western banks have worried about the reputational risk of investing in the conglomerate amid the US probes, according to three Indian bankers familiar with the matter and a Reuters report.”

The Post quoted a response from the Adani group: “We categorically deny involvement in any alleged government plans to direct LIC funds…. LIC invests across multiple corporate groups — and suggesting preferential treatment for Adani is misleading. Moreover, LIC has earned returns from its exposure to our portfolio.”

The Congress demanded a joint parliamentary committee probe.

“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?” Congress communications head Jairam Ramesh said in a statement.

“...The costs of throwing public money at crony firms became clear when LIC suffered a staggering ₹7,850 crore loss in just four hours of trading on 21 September 2024, following the indictment of Gautam Adani and seven of his associates in theUnited States.

“Adani has been accused of orchestrating a ₹2,000 crore bribery scheme to secure high-priced solar power contracts in India. The Modi government has refused, for nearly a year, to serve a US SEC (Securities and Exchange Commission) summons to the Prime Minister’s most favoured business conglomerate.”

Former Delhi deputy chief minister Manish Sisodia of the Aam Aadmi Party posted on X: “The people of the country, by expressing their trust in LIC, had deposited ₹32,370 crore rupees, but the BJP government has traded that very trust with Adani.

“The country’s millions of hardworking people have saved every penny for their children’s education and family’s security, but the Modi government has squandered that hard-earned blood and sweat to bail out its crony industrialist friend.”

Defending its Adani investments, the LIC said: “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. No such document or plan as alleged in the article has ever been prepared by LIC, which creates a roadmap for infusing funds by LIC into Adani group of companies.

“The investment decisions are taken by LIC independently as per Board approved policies after detailed due diligence. Department of Financial Services or any other body does not have any role in such decisions.”

Trinamool MP Mahua Moitra responded on X, saying: “Sorry @LICIndiaForever what exactly is false? That you used ₹30,000 crores of tax payer money to bail out Adani? Or that you asked @FinMinIndia to hurry up with approvals?”

The Post concluded by saying: “Ravi Nair, the independent investigative journalist who co-wrote this article, was named in a defamation suit filed by Adani Group in September, citing an article he co-wrote for the Indian magazine Frontline, as well as online interviews and social media posts where he discussed his reporting for the Guardian.

“The lawsuit has been criticised by media rights groups, including the Committee to Protect Journalists, which called on the Indian government to ‘stop censoring legitimate reporting on powerful business interests’.”