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Berkshire says General Re chief Brandon resigns

14/04/2008 - 16:44

NEW YORK (Reuters) - Warren Buffett's Berkshire Hathaway Inc said Joseph Brandon has decided to resign as chairman and chief executive of its General Re Corp reinsurance unit, effective Monday.

Brandon was once considered a leading candidate to replace the 77-year-old Buffett at Berkshire's helm.

His departure follows the fraud convictions in February of four former General Re executives and a former executive of American International Group Inc over a reinsurance transaction that prosecutors said boosted AIG's loss reserves and made its results look better.

Prosecutors have pressured Berkshire to replace Brandon, the Wall Street Journal said earlier this month. Brandon has not been charged, but his status grew less certain after the U.S. Securities and Exchange Commission told him in 2005 that he could face charges that he violated U.S. securities laws.

Franklin "Tad" Montross, General Re's president, will replace Brandon as chairman and chief executive of the Stamford, Connecticut-based company.

Berkshire did not in a statement give a reason for Brandon's departure. The company did not immediately return a request for comment. A spokesman for the U.S. Attorney in Connecticut declined to comment.

Before becoming General Re's chief executive in 2001, Brandon had worked as the company's chief financial officer, and also as an executive vice president.

Ronald Ferguson, whom Brandon replaced as chief executive, was among the executives convicted in the trial over the AIG transaction. Buffett has denied knowledge of the transaction, and was not called to testify at the trial.

General Re last year generated more than $6 billion of revenue, about 5 percent of Omaha, Nebraska-based Berkshire's total.

(Reporting by Jonathan Stempel, editing by Gerald E. McCormick and Dave Zimmerman)


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