Berkshire's Buffett: I Am Clean On AIG Deal

By Michael Ha

NU Online News Service, March 29, 4:20 p.m. EST?Berkshire Hathaway Inc. in a rare company statement defended its legendary chairman Warren Buffett, saying that contrary to a media report, Mr. Buffett was not personally involved in a controversial finite reinsurance deal with American International Group.[@@]

The company also announced that as part of its cooperation with regulatory probes, Mr. Buffett, 74, will voluntarily talk with "investigation authorities" sometime soon.

But Berkshire asserted that the buck stops at the individual business-unit level, and not with Mr. Buffett.

In particular, the company blasted a recent article filed by The Wall Street Journal, calling it "inaccurately reported."

The article claimed that Mr. Buffett was personally involved in discussing the finite reinsurance deal between Berkshire's reinsurance unit General Re and AIG. This transaction has been at the heart of growing regulatory probes into similar types of transactions and whether such contracts have been used by insurers such as AIG to inflate their financial statements.

"It was reported that Mr. Buffett was briefed on the 'nature' and 'structure' of the 2000-2001 reserve transactions between Gen Re and AIG," Berkshire stated. But the company said that to the contrary, "Mr. Buffett was not briefed on how the transactions were to be structured or on any improper use or purpose of the transactions."

Berkshire also refuted a claim that Mr. Buffett typically speaks with the heads of Berkshire's units late each afternoon.

"With the exception of Ajit Jain, [who manages National Indemnity] Mr. Buffett speaks infrequently with business unit managers and leaves operating decisions for the business units to the individual managers?a policy publicly reported regularly since 1984," according to Berkshire.

The company added that it doesn't expect any restatement of its financial reports. It also noted Berkshire Hathaway and General Re have been actively cooperating with the ongoing reinsurance investigation. "In connection therewith, a number of Berkshire/Gen Re representatives have voluntarily given interviews to the investigating authorities, and Mr. Buffett will shortly do so as well," the company said.

Mr. Buffett's voluntary interview with regulators is scheduled for April 11, according to The Wall Street Journal, while AIG's former CEO and chairman Maurice Greenberg is slated to give a deposition the following day.

Special Reports /

Berkshire's Buffett: I Am Clean On AIG Deal

Related Stories

Recommended For You