NEW YORK (Bloomberg) — A former director at American International Group Inc. contradicted key testimony of former chief executive officer Maurice (Hank) Greenberg at a civil trial over whether his private company looted $4.3 billion.

AIG, once the world's largest insurer, accuses Greenberg's Starr International Co., or SICO, of retaliating after his ouster in March 2005 by ending a deferred-compensation plan for company employees. Greenberg had testified that an outside lawyer told AIG directors in January 2005 that SICO should stop funding the retirement plan for corporate-governance reasons.

Former AIG director Frank Zarb testified yesterday that he recalled no such discussion during a dinner at the St. Regis Hotel in New York. Rather, Zarb told federal jurors in New York, that AIG's independent directors focused at the meeting on when Greenberg, 84, would retire and who would succeed him.

"Was there any discussion of corporate governance other than the succession issue," AIG attorney Roberta Kaplan asked.

"Not that I recall," said Zarb, a director for New York- based AIG from 2001 to 2008. Zarb served as interim AIG chairman after Greenberg's ouster.

Zarb said AIG and SICO never entered into a "mutual agreement" to end SICO's funding of the deferred-compensation programme, as Greenberg had testified they did. AIG claims that SICO unilaterally ended the retirement plan and breached its duty to continue to compensating top executives at the insurer.

AIG claims it deserves the proceeds of $4.3 billion in its shares that SICO sold after terminating the retirement plan. SICO counters that it had the right to dissolve the programme at any time and the beneficiary ultimately was charity, not AIG.

On cross-examination, SICO attorney David Boies sought to show that Zarb had limited knowledge of the deferred-compensation plan, and that his testimony contradicted what he said in a pre-trial deposition.