Maurice Greenberg, former chief executive of American International Group (AIG.N), said the company was planning to sell its unit, HSB Group, at a "distressed" price and sought an explanation from the AIG board for the sale process.
AIG, which has been crippled by losses on bad mortgage bets, agreed to sell HSB to German reinsurer Munich Re (MUVGn.DE) for $742 million in December. A full explanation of the sale process that led to the approval of the sale of such a major asset at such a low value is required from the board, Greenberg wrote in a letter to AIG's board.
"Among other things, we would like to know what specifically did the board do to ensure that the company was sold for the highest available price," he wrote in the letter that was submitted to the U.S. Securities and Exchange Commission.
AIG, once the world's largest insurer, plans to sell several assets to raise funds to repay a $150 billion U.S. government bailout.
"Certainly, selling major assets at fire-sale prices is not a viable strategy for reviving the company or even repaying the government," Greenberg, who ran the company for 38 years, said in the letter.
Greenberg and affiliates own about 10.06 percent of AIG.
Shares of the company closed at $1.66 Monday on the New York Stock Exchange.
(Reporting by Amiteshwar Singh in Bangalore; Editing by Himani Sarkar)