Congress Alleges Systematic Misuse of LIC Funds in “Modani MegaScam”; LIC Issues Strong Rebuttal

Congress Alleges Systematic Misuse of LIC Funds in “Modani MegaScam”; LIC Issues Strong Rebuttal

New Delhi, October 25:
The Indian National Congress today renewed its attack on the Modi government over what it has termed the “Modani MegaScam”, following media revelations alleging misuse of Life Insurance Corporation of India (LIC) funds to bail out the Adani Group.

In a detailed statement, Shri Jairam Ramesh, MP and General Secretary (Communications), All India Congress Committee, cited internal documents reportedly showing that officials from the Ministry of Finance and NITI Aayog had pushed through a proposal in May 2025 to invest ₹33,000 crore of LIC funds into various Adani Group companies. The stated objective, according to these reports, was to “signal confidence in the Adani Group” and to “encourage participation from other investors.”

Ramesh questioned the motives behind such a move, saying:

“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? Is this not a textbook case of ‘mobile phone banking’?”

He alleged that this decision directly exposed public funds to risk, noting that LIC suffered a ₹7,850 crore loss in just four hours of trading on September 21, 2024, after the indictment of Gautam Adani and seven associates in the United States for allegedly orchestrating a ₹2,000 crore bribery scheme to win inflated solar power contracts in India.

Ramesh accused the Modi government of shielding its “favoured business conglomerate”, claiming it has refused for nearly a year to serve a US SEC summons related to the case.

He further outlined what he called the “Modani MegaScam”, alleging:

• Misuse of agencies like ED, CBI, and Income Tax Department to pressure companies to sell assets to the Adani Group.
• Rigged privatisation of airports and ports for the group’s benefit.
• Diplomatic misuse to secure foreign contracts for Adani-linked entities.
• Over-invoicing of coal imports by Adani associates, raising power tariffs in Gujarat.
• Pre-election power supply contracts at inflated rates in Madhya Pradesh, Rajasthan, and Maharashtra.
• Land allocation at ₹1 per acre for a power project in poll-bound Bihar.

Calling the scandal “deeply institutional,” Ramesh reiterated Congress’s demand for a Joint Parliamentary Committee (JPC) to probe the issue, recalling the party’s earlier series “Hum Adani Ke Hain Kaun (HAHK)”. He urged that, as a first step, the Public Accounts Committee (PAC) should immediately investigate LIC’s investments in the Adani Group, as it falls well within its powers.

“The PAC must examine how LIC — a trusted public institution managing the savings of 30 crore policyholders — was allegedly forced to make risky investments to benefit one business house. This is a betrayal of public trust,” Ramesh stated.

LIC Responds: “Allegations False, Baseless and Far from Truth”

Following the controversy, the Life Insurance Corporation of India (LIC) issued an official press release rebutting the allegations made in The Washington Post article.

INSURANCE CORPORATION OF INDIA)
Rebuttal to the article of The Washington Post

“The allegations leveled 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. The Department of Financial Services or any other body does not have any role in such decisions. LIC has ensured the highest standards of due diligence and all its investment decisions have been undertaken in compliance with extant policies, provisions in the Acts, and regulatory guidelines, in the best interest of all its stakeholders.

These purported statements in the article appear to have been made with the intention to prejudice the well-settled decision-making process of LIC and to tarnish the reputation and image of LIC and the strong financial sector foundations in India.”

While the Congress continues to demand accountability and a parliamentary investigation, the LIC has firmly denied any external interference, asserting that its investment decisions remain independent and compliant with regulations.

The political and financial implications of the alleged “Modani MegaScam” are likely to remain a contentious issue in the days ahead.