UPDATE 2-Former CEO sues Abu Dhabi's Taqa, says 'forced out'

* Former CEO sues firm for $460 million

* Suit alleges breach of contract by Taqa

* Taqa calls claims "spurious"

* Taqa shares slip 1.7 pct

(Adds analysts comments, market reaction)

By Amena Bakr

DUBAI, Sept 1 (Reuters) - Abu Dhabi National Energy Co's TAQA.AD (TAQA) former chief executive has sued the company in a U.S. court, alleging he was forced out last year for trying to stop "kickbacks, bribery, accounting fraud and corruption" at the energy firm.

Taqa shares were down 1.7 percent at 0946 GMT after the news of the lawsuit.

Former Taqa CEO Peter Barker-Homek said in the lawsuit, which was filed in the U.S. District Court of Eastern Michigan, that he was summoned to a meeting in 2009 and presented with a "severance agreement" to step down.

Barker, who is seeking at least $460 million in damages, said he signed the agreement because he feared arrest and imprisonment, and forfeited "millions of dollars owed to him".

Taqa, 75 percent-owned by the government of Abu Dhabi, refuted the former CEO's claims in the lawsuit.

"The Company takes any challenge to its reputation extremely seriously and will vigorously defend itself and the individuals named against the spurious allegations made in the filing," a spokesman said in an emailed statement, giving no further details on how the case would be handled.

The shares slumped during a relatively quiet Ramadan period, when trading volume usually dwindles.

Analysts said the shares reacted to the news but they were not convinced of the charges.

"The stock is relatively illiquid, so this will be more about sentiment," said a Dubai-based energy analyst.

Theodore Karasik, director of research at Dubai-based INEGMA, called the case "mud slinging".

"Abu Dhabi has smart public relations and I'm sure they'll be able to counter this," Karasik said, also dismissing any possibility Barker's case could damage relations between Abu Dhabi and the U.S.

Taqa, based in the Abu Dhabi emirate of the United Arab Emirates, owns assets in oil and gas production and power generation in the Middle East, North America, the North Sea and India, and is one of the vehicles the emirate uses to invest oil money.

Corruption cases had been reported to be "unusually high" last year in neighbouring emirate Dubai, which shocked markets last November with a request to delay $26 billion in debts linked to its flagship firm Dubai World. DBWLD.UL

The United Arab Emirates ranked 30 of 180 firms on the Corruption Perceptions Index (CPI) last year, while the United States was 19. (Additional reporting by Matt Smith; Editing by Karen Foster)