NEW YORK (Reuters) ? For American International Group Inc., former Chairman and Chief Executive Maurice ?Hank? Greenberg is gone but not forgotten ? his ghost seems to be hanging over the stock, depressing its price, analysts say.

In the last six months, AIG?s shares have lost nearly 16 percent of their value, far worse than the 7 percent decline for the Standard & Poor?s Insurance Index that measures its peers.

Analysts like AIG, the world?s largest insurer, particularly at its current price. Its return on equity, at nearly 13 percent is nearly 4 percentage points higher than the average for its sector.

But it?s tough convincing the market of AIG?s merits while the hard-charging Greenberg continues to threaten the company.

?Let?s face it, AIG has lost its lustrr and as long as its former CEO remains in the headlines and continues to sell his stock, the company will likely not be able to regain its premium valuation,? said A.G. Edwards & Sons insurance analyst J. Paul Newsome in a recent report.

Newsome lowered his price objective to $75 from $80 a share, but repeated his ?aggressive buy? recommendation on AIG. AIG declined to comment.

Greenberg resigned from AIG under pressure from the company?s board in February 2005 and currently faces civil fraud charges brought by New York Attorney General Eliot Spitzer.

This past February, AIG paid a record $1.6 billion to settle regulatory issues that occurred while Greenberg was CEO.

The 81-year-old Greenberg has pleaded innocent to Spitzer?s fraud charges and criticised AIG for settling with regulators, saying that under his leadership, the company did nothing wrong.

Greenberg still wields a great deal of power, and he isn?t using it to help his former company.

Greenberg and companies he controls have sold 4.5 million AIG shares over the past few months. ?There is a concern that he (Greenberg) knows something about AIG ... and that that something is bad,? said Newsome.

Greenberg spokesman Howard Opinsky responded that Greenberg was concerned about the current leadership under Chief Executive Martin Sullivan, who replaced him.

Greenberg is also in legal battles with AIG.

This past week his attorneys were in court three times seeking to obtain records from PricewaterhouseCoopers, AIG?s auditors.

Finally, Greenberg has become a direct competitor to AIG with his C.V. Starr & Co. insurance company.

Formerly C.V. Starr and AIG had close relationships, sharing offices and personnel. Now Greenberg sends C.V. Starr?s business to other insurers such as Chubb Corp. and Berkshire Hathaway Inc.. Opinsky claims AIG set up agencies to compete with C.V. Starr rather than the other way round.

Either way, ?it can?t be good to have Hank Greenberg trying to take business from your company,? said Matt Nellans, a Morningstar analyst. ?He knows everyone.?

Despite the Greenberg challenge, Nellans also feels AIG is undervalued: ?When sentiment goes against a good company, that just makes it cheaper to buy,? he said.