The billionaire investor's claims, made in a letter to Illumina's shareholder that the FT saw, come as he continues his push for board seats on the world's largest genome sequencing company and for it to unwind the Grail acquisition.

Illumina completed the takeover of Grail, which develops cancer detection tests, in August 2021, without winning U.S. or European regulatory approval, although it has since won U.S. clearance and is currently fighting for European approval.

Icahn, in his letter, alleges that on the day before closing the deal, Illumina directors demanded the company commit to providing them with an "unprecedented level of additional personal liability insurance" protection, the FT reported.

"This smells strongly to us like a quid pro quo," the newspaper quoted Icahn as saying in the letter sent on Thursday.

Icahn, Illumina and Grail did not immediately respond to Reuters' requests for comments.

Illumina has defended its decision to acquire Grail and rejected Icahn's allegations over the deal.

However, earlier this month, the company said it would divest Grail if it lost its appeal to the European Commission.

(Reporting by Akriti Sharma in Bengaluru; Editing by Savio D'Souza)