AIG sees no need to honor ex-CEO request to delay AGM

By Lilla Zuill

NEW YORK (Reuters) - Maurice "Hank" Greenberg, former chief executive of American International Group (AIG.N: Quote, Profile, Research, Stock Buzz), 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.

But AIG said late on Monday 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 May 11 letter to the board, a copy of which was filed with the U.S. Securities and Exchange Commission on Monday.

AIG shares fell nearly 5 percent after news of the letter, with the stock ending the day at its lowest point since October 1998.

The letter followed AIG's reporting last Thursday 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 subprime mortgages. Overall results also disappointed, with lackluster operating results reported by a number of units. The company also said it was raising capital to bolster its balance sheet.

The company late on 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 with the issue of fixed-income securities.

AIG's loss came after it a quarter earlier posted a then record net loss of $5.3 billion, also as a result of writing down the value of the same securities -- credit default swaps -- which basically guaranteed subprime mortgage bonds and other assets against default.

"AIG is in crisis," Greenberg said, in the letter calling on AIG's board to postpone its annual general meeting.  Continued...