Maurice "Hank" Greenberg wrote to AIG on Wednesday resigning from the board of the embattled company, complaining that he wasn't being provided with information about AIG's ongoing affairs.
"My decision to resign now results from my inability to receive information regarding the company and its operations necessary to fulfill my fiduciary duties," said Mr. Greenberg.
Last week, AIG published its much-delayed 2004 annual report which re-stated results from 2000 to 2003, reducing profits by $3.7bn, after multiple investigations into its accounting practices. 80-year old Greenberg had previously resigned as Chairman and CEO of the company.
New York State Attorney General Eliot Spitzer and the New York State Insurance Department have brought civil charges against American International Group, Mr Greenberg and the insurance company's former chief financial officer, alleging that AIG engaged in sham transactions, hid losses and created false income.
AIG said: "We have been cooperating and will continue to cooperate with the attorney general, the superintendent, and other regulatory agencies on all these matters. There are no new claims raised in the complaint."
When questioned by the Securities and Exchange Commission and the New York Attorney General's office in their investigations of AIG this spring, he declined to answer, invoking his Fifth Amendment right against possible self-incrimination.
Head of General Re's Dublin-based Cologne Re unit, John Houldsworth agreed last week to cooperate with the US authorities in a probe into a transaction undertaken by American International Group (AIG) and General Re which was uncovered during the investigation launched by Eliot Spitzer. Mr Houldsworth is said to intend to plead guilty to criminal conspiracy, and will furnish investigators with detail on the roles played by other General Re executives in creating and undertaking the transaction in question.
Alongside the civil action against AIG and its officers, the slew of allegations has led a grand jury investigation of potentially criminal conduct by individuals at the insurance group, which is likely to reach its conclusions in a few weeks' time.
AIG was initially accused of using Barbados and Bermuda companies to park reinsured risks off its balance sheet inappropriately, but the probe led by Eliot Spitzer uncovered alleged accounting improprieties and possibly unlawful stock purchases.
According to the complaint filed by Spitzer, AIG sought at first to hide losses in a Brazilian life-insurance unit, but decided later to address other losses in a Taiwanese unit, Nan Shan Life Insurance Co., that was part of the same operating division. In the end, AIG turned the Nan Shan underwriting losses into investment losses using a series of complex transactions with a Barbados insurer, Union Excess Reinsurance Co., that AIG secretly controlled. Mr. Greenberg "personally was apprised of the progress of both" sets of transactions, the lawsuit alleges.
Mr Greenberg has denied the allegations brought against him.
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