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Thursday April 07, 10:23
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AIG sees new turn in accounting matter with offshore insurers
(by Dr.Goldfinger)
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American International Group is floating in the accounting fraud scandal that sees new turns with the involvement of offshore insurance companies.
It is not clear whether AIG’s top executives were seeking to hide liabilities using foreign insurance companies, the WSJ says, amid the probe launched by the Securities and Exchange Commission and New York Attorney General Eliot Spitzer.
The world’s No.1 insurer is accused of accounting fraud and misleading shareholders. The company’s longtime chairman and CEO Maurice R. Greenberg was forced to step down due to the scrutiny from the regulators this month after refusing to testify on the issue.
Bermuda-based Astral Reinsurance Co. has been AIG’s reinsurer from 1984 through 1998. The company’s top executives have been managing the firm all these years, data show.
Regulators are keeping an eye on Astral starting last month. Two more companies are under scrutiny - Richmond Insurance Co., also of Bermuda, and Union Excess Reinsurance Co., of Barbados. Acounting errors could have saved as much as $1.77 billion, or about 2%, from its net worth, last week’s statement shows.
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