American International Group (AIG) has launched a legal battle against its former chief financial officer, Howard Smith and ex- chief executive Maurice ‘Hank’ Greenberg over the alleged 'misappropriation' of shares.
In the law suit AIG alleges that the CFO and CEO, along with five other board members, 'misappropriated a special block of AIG shares' estimated to be worth $20bn (£9.9bn),The Times has reported.
The special shares were owned AIG affiliate Starr International to block hostile takeovers and reward AIG staff. The former directors stand accused of leading a board room coup at Starr and then halting the use of the shares to reward AIG employees.
AIG now claims that action breached the directors’ fudiciary duty.
AIG hopes to regain control of 290m shares still held by Starr. But an estimated $3bn worth of stick has already been sold to invest in China and Russia. Greenberg remains in control at Starr.
The other board members facing the law suit are Edwards Matthews, Ernest Stempel, L. Michael Murphy, John Roberts and Houghton Freeman.
Further reading:
AIG steps up action against Maurice 'Hank' Greenberg with new Starr lawsuit
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