The share price of American International Group has continued to fall following speculation that the US insurer may choose to restate its 2004 financial results. The company is also suggested to be ready to sever all ties with former CEO Maurice Greenberg, in an effort to limit the damage from a series of regulatory probes.
Mr Greenberg resigned as head of the world’s biggest insurance group earlier this week amid an investigation by the US Securities and Exchange Commission into a reinsurance transaction AIG did with a unit of Warren Buffett’s Berkshire Hathaway Inc. Shares of AIG fell 3% following news of Greenberg’s departure.
As part of a management succession plan Martin Sullivan will succeed Greenberg as president and CEO. AIG stated however, that Mr Greenberg would continue to serve in the capacity of non-executive chairman, a move brought into doubt by certain media reports.
Having placed its CFO on leave, AIG then announced that the filing of its 2004 annual report would be delayed. Although the company stated that this was because of an ongoing internal review and that it did not expect any significant changes to its financial position, investors were said to be concerned at the potential for further problems to develop.
These concerns were reflected by Fitch Ratings decision to cut AIG’s long-term rating to AA-plus from AAA. Standard & Poor’s and AM Best Co said they may also cut AIG’s ratings, referring to the regulatory concerns.