Ex-AIG chief assails move to restate results

NEW YORK -- The former chief executive of American International Group Inc., Maurice ''Hank" Greenberg, insists that he followed proper accounting procedures during his 38 years at the helm and believes that the insurance company's decision to restate five years of earnings was damaging to shareholders.

The conclusions were part of a ''white paper" prepared by Greenberg's legal team in response to AIG's 2004 annual report, which was filed with the Securities and Exchange Commission on May 31. A copy of the white paper was made available yesterday to the Associated Press.

The huge insurance company, under investigation by state and federal regulators over reinsurance deals and its accounting for offshore subsidiaries, was late in filing its annual report and restated earnings back to 2000. The move cut shareholders' equity by $2.26 billion, or 2.7 percent, to $80.61 billion.

The white paper said Greenberg was unable to respond point-by-point to the accounting changes because AIG has refused to give him documents and information he needs.

But, the paper insisted, the 80-year-old Greenberg ''disagrees with many of the accounting changes made and believes that many of the changes are damaging to the interests of AIG and its stockholders."

The paper argues that Greenberg was not directly involved in some of the decisions that were reversed in the restatement. In other cases, it suggested that the new management team and AIG's auditor, PricewaterhouseCoopers, ''have changed their minds" about how certain items should be accounted for.

''Significantly, many of the AIG and PwC personnel who were involved in the restatement were the same personnel who made or participated in the initial accounting determination that they have now reversed," the white paper said.

It also suggested that fear of legal action by regulators was the motivation for the restatement.

''AIG's rush to concede wrongdoing may be explained in part by the current regulatory environment . . . but cannot be justified on that basis," the white paper said.

It added: ''The rush to judgment may also be explained, in part, by the outside directors' interest in legitimizing their removal of Mr. Greenberg . . . and by understanding the long-held ambitions of [at] least one or two such directors to take a leading role at AIG." No directors were named.

An AIG spokesman said the company had not seen the white paper and could not comment.