Beleagurered American International Group conceded Wednesday that it had improperly booked transactions with the reinsurance giant General Re, a subsidiary of billionaire Warren Buffett's Berkshire Hathaway holding company. "These are very serious issues," said Howard Mills, acting insurance superintendent for the state of New York, of the misleading accounting, which is expected to lower AIG's book value by 2 percent, or about $1.7 billion. Buffett, who reportedly was unaware of how the transactions were structured, is due to be questioned by federal regulators and the New York Attorney General's office April 11. A day later, Maurice (Hank) Greenberg, who led AIG for almost 40 years, also is scheduled to discuss the reinsurance issue with investigators. Greenberg was forced out as chief executive officer by AIG's board earlier this month and said Tuesday that he also will resign shortly as company chairman. (Story, page 3.)
Saks Inc., the department store chain best known for its high-end merchandise, is seeking to sell 241 regional outlets - and possibly the entire business, The New York Times reported. Meanwhile, the trade publication Women's Wear Daily said it has learned that Belk Inc., a regional retailer based in Charlotte, N.C., and the private equity firms Blackstone Group and Apollo Advisors are interested in Saks' regional store division, which posted $3.7 billion in sales last year. In all, Saks, which is based in Birmingham, Ala., operates more than 300 stores in 40 states.
The US must be punished for not repealing a law that allows companies to collect proceeds from import taxes on their foreign competitors, the European Union's executive commission said, announcing that retaliation will begin May 1. It indicated that duties against such goods as paper, textiles, machinery, and agricultural commodities will increase by 15 percent - a move that is expected to result in about $28 million worth of new revenue a year. The EU said it is acting because Congress has yet to overturn a measure known as the Byrd amendment - for US Sen. Robert Byrd (D) of West Virginia - which the World Trade Organization ruled illegal three years ago. In addition to the EU's 25 members, Japan, South Korea, India, Brazil, Chile, Mexico, and Canada also are expected to retaliate, an informed source said. Opposition to repealing the Byrd amendment, also known as the Continued Dumping and Subsidy Offset Act of 2000, reportedly is led by Democrats in both the House and Senate.