Buffett support for ex-AIG boss

Mr Buffett has helped regulators investigating AIG

Billionaire investor Warren Buffett has expressed support for the former boss of scandal-hit US insurance giant AIG.

Maurice Greenberg had created "an extraordinary company", Mr Buffett told shareholders of his Berkshire Hathaway holding group.

US regulators are investigating alleged fraud in a deal between American International Group and Berkshire-owned reinsurance firm General Re.

Mr Greenberg resigned from AIG in March, in the wake of the scandal.

Improper accounting

Mr Buffett - who is known as the 'sage of Omaha' because of his legendary business acumen - told Berkshire shareholders: "He (Greenberg) became the most important figure in the property casualty business."

At the moment we've got more money than brains, and we hope to do something about that Warren Buffett, Berkshire Hathaway chairman

However, Mr Buffett refused to comment on the current investigation at AIG.

Separately, Mr Buffett told shareholders at Berkshire's annual general meeting in Omaha, on Saturday, that the group was on course to announce first-quarter earnings of about £400m (£210m).

However, a $310m currency trading loss caused by the stronger dollar would mean an overall loss in investments during the quarter, the Berkshire chairman said.

Berkshire's investments include major holdings in Coca-Cola and American Express. It also owns a number of firms, including jewellery and furniture companies.

AIG has already accepted that its accounting for a transaction with General Re in 2000 - which appeared to boost AIG's revenues at a time when the market was uneasy about the insurer's liabilities - was improper.

Mr Greenberg has refused to answer questions from regulators about AIG's activities, invoking rights under US law which protect people from self-incrimination.

Cash rich

Last month, Mr Buffett met with New York State Attorney General Eliot Spitzer to assist with investigations into AIG. However, regulators stressed that Mr Buffett was not a target of the probe.

Mr Greenberg led AIG from 1967 until March this year

Mr Buffett said Berkshire hoped to announce "in the next few weeks" an acquisition in the insurance industry worth almost $1bn. Berkshire is currently holding about $44bn in cash.

"We'd love to have one in the $5bn to $10bn range," he said "At the moment we've got more money than brains, and we hope to do something about that."

Mr Buffett said that Berkshire was considering paying its first dividend since 1967.

But he resisted shareholder attempts to disclose any more information about the involvement of Berkshire's insurance subsidiaries in regulatory probes.

General Re has been investigated by authorities in both the US and Australia.