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Ex-CEO urges AIG to delay meeting after huge loss

May 13, 2008|From Reuters

NEW YORK — Maurice "Hank" Greenberg, former chief executive of American International Group Inc., has said the insurer is in crisis and urged a delay in its annual general meeting scheduled for Wednesday, according to a letter he sent to the board.

AIG said Monday that its board sees no need to postpone the meeting, according to a spokesman.

"Several top shareholders of AIG have called me expressing deep concern about the persistent and seemingly endless destruction of value at AIG," Greenberg said in the Sunday letter, which was filed with the Securities and Exchange Commission on Monday.

After news of the letter AIG shares fell $1.91, or nearly 5%, to $38.37, their lowest since October 1998.

The letter followed AIG's report Thursday of a $7.8-billion first-quarter loss, its largest ever, as a result of a large write-down to the value of securities linked to sub-prime mortgages. Overall results also disappointed investors, with lackluster operating results reported by a number of units.

The company late Monday raised $11.9 billion, according to an underwriter -- more than the $7.5 billion that the offerings of common stock and mandatory convertibles were expected to raise. AIG plans to raise $5 billion more at a later date by issuing fixed-income securities.

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