Greenberg Objects To AIG Sale Of Asian Unit

Maurice Greenberg, the former American International Group chairman, has once again critiqued efforts by AIG Chief Executive Officer Edward Liddy to pay the firm's government debt by selling assets.

Mr. Greenberg, who was forced from the firm in 2005, this time objected to reported plans for the sale of AIG's Asian life unit, American International Assurance Company (AIA). AIG was forced to give the government a 79.9 percent interest in the company to obtain a costly $50 billion loan.

“It has been widely reported that you are contemplating the sale in part or whole of AIA. AIA is one of the crown jewels of AIG and the only foreign life insurance company in China that is wholly owned and, as such, does not require a local partner,” Mr. Greenberg wrote Mr. Liddy in a letter filed with the Securities and Exchange Commission.

Mr. Greenberg, the CEO and chairman of C.V. Starr & Co., still controls a substantial stock interest in AIG. At one point before the company declined, his holdings totaled $15 billion.

He wrote Mr. Liddy that: “AIA, as you probably know by now, also operates in every country in Southeast Asia and has been the flag carrier of life insurance in that part of the world. To dispose of AIA in whole or part could seriously damage the future potential of AIG.

“We have a vast difference of opinion as to how best to pay back the taxpayer. Your strategy is to break up AIG and retain the property-casualty units. The property-casualty units are losing people and business daily and its future as a stand-alone operation is questionable.”

He added, “Selling off pieces of AIG's foreign companies will hardly create the jobs or tax payments in the U.S. in the future.”

According to one report the deal being contemplated would involve a sale for $10 billion of AIA without the India-based segment of its business. The potential acquirer is said to be the Indian arm of Reliance, Reliance Anil Dhirubhai Ambani Group (ADAG).