AIG in 'Crisis,' Ex-Chief Says

Former American International Group (AIG Quote) CEO Maurice "Hank" Greenberg slammed his old company in the wake of its big first quarter loss, and asked its board to postpone its annual shareholders meeting this week.

"AIG is in crisis," Greenberg wrote in a letter to the AIG board of directors, filed with the Securities & Exchange Commission on Monday.

Last Thursday, AIG announced a record $7.8 billion quarterly loss due in part to huge writedowns on its credit default swap portfolio. It also unveiled plans to raise $12.5 billion to shore up its balance sheet, while confounding some shareholders by also raising its dividend by 10%.

"These events have led to a complete loss of credibility with the investment community," Greenberg wrote. "The company's shareholders need to absorb the significance of the company's first quarter losses. They also need time to consider the board's response to the crisis and the issues raised by this letter. For this reason and others, a postponement of this week's annual meeting should be considered, so that all shareholders can give careful thought to how best to move AIG forward."

Greenberg was CEO of AIG for nearly four decades before he was ousted in 2005, when it was under investigation for its accounting. He's still fighting civil charges related to the investigation, although the prosecutor that led the charge against Greenberg, former New York Governor Eliot Spitzer, recently resigned in disgrace after admitting the he was engaging the services of a high-end prostitution ring.

Greenberg remains a major stakeholder of AIG and heads Starr International Co., a firm that is the company's largest shareholder. Shares of AIG have declined in price by more than 40% since Greenberg's departure, and they're down by 34% so far this year.