CRIMINAL and civil regulators will today demand Warren Buffett, the billionaire investor and chief executive of Berkshire Hathaway, explain what he was told about a transaction between his General Re insurance unit and AIG.

Investigators from the US Securities and Exchange Commission, the office of Eliot Spitzer, the New York attorney-general, and the Department of Justice are to begin the questioning of Mr Buffett later today.

Mr Buffett has been drawn into the investigation over a series of transactions that took place between 2000 and 2001. About $500 million was transferred from General Re to AIG as expected insurance claims along with another $500 million in premiums.

AIG booked the premiums as revenue and then added $500 million to its reserves to cover the risk.

AIG has since admitted that the deal should have not been treated as an insurance deal but as a loan.

General Re earned $5 million for organising the deal. The investigation threatens to sully the reputation of one of the most respected voices in corporate America as fresh revelations about the scandal emerge every day.

Mr Buffett has a spotless regulatory record and the authorities have maintained that he is being treated as a witness and not a suspect. He is not expected to be placed under oath.

In a rare public statement after news of the interview came to light, Mr Buffett sought to distance himself from the suspect transaction.

In the statement, Berkshire Hathaway denied that he was briefed on the details of the deal.

“To the contrary, Mr Buffett was not briefed on how the transactions were to be structured or on any improper use or purpose of the transactions.”

The statement added that Berkshire Hathaway said that it did not plan to restate its books.

The scandal has forced AIG’s chairman and chief executive Maurice “Hank” Greenberg of four decades to resign.

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