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May 05, 2005 at 08:00 PM
Maurice Greenberg is criticizing the way American International Group Inc. is communicating with the public and the way it is communicating with him.[@@]
Greenberg, former chairman of AIG, New York, sent the AIG board a letter complaining about a press release the board issued May 1. The release deals with AIG’s plans to restate 5 years of financial results.
One group of accounting changes will cut shareholder equity by about $2.7 billion and changes in accounting for derivatives will increase shareholder equity by $2.4 billion, leaving a net reduction of about $300 million, according to the May 1 press release.
“Given the innuendo contained in the AIG release of May 1, which can be interpreted as impugning the integrity of prior and present AIG management, I was surprised that the release provided no factual basis to explain why AIG or [company auditor] PricewaterhouseCoopers changed its position” on the accuracy of the earlier financial statements, Greenberg writes in his letter.
The proposed restatement involves hindsight analysis of “complicated accounting issues, which were originally made on a good faith basis by both former and present management and AIG’s auditors without objection or inquiry from the board or any member of the board,” Greenberg writes.
