NEW YORK (Bloomberg) — American International Group Inc., the insurer selling assets to repay a US government loan, should pull its Tokyo headquarters building from the market, former chief executive officer Maurice (Hank) Greenberg said.

"If you sell that building, the loss of face to every Japanese employee would be profound," Greenberg, 83, said yesterday at a breakfast meeting in New York.

AIG, once the world's largest insurer, said last week it was looking for potential buyers for the 15-storey tower near Japan's Imperial Palace. The New York-based insurer needed an $85 billion government rescue in September after losses tied to credit-default swaps sold to banks, a bailout that later expanded to about $150 billion.

Greenberg, who led AIG for almost 40 years before being forced to retire in 2005, said yesterday the government should rebuild the company, not seek the "dumb strategy" of selling most of its assets. Greenberg said he spoke this month with Treasury Secretary Timothy Geithner about the insurer.

Christina Pretto, an AIG spokeswoman, didn't return a call for comment. Greenberg told attendees at the event, set up by New York- based Source Communications, that the US will "never get" back the money it loaned AIG.

CEO Edward Liddy, who took over in September after the US intervention, has vowed to repay "every penny" of the loan, which amounted to $38.9 billion of a $60 billion credit line at year-end.

Merrill Lynch & Co. is working with AIG to find buyers for the Tokyo building. AIG has struck deals to sell operations from Connecticut to the Philippines to raise more than $2.3 billion to pay down the loan.

Greenberg controlled the largest stake of AIG shares before the government takeover through personal holdings and investment firms C.V. Starr & Co. and Starr International Co. The stock plunged 97 percent last year. AIG fell 14 cents to 59 cents in New York Stock Exchange composite trading yesterday.

Greenberg was forced to retire in March 2005 amid state and federal probes into accounting and sales practices. He denies any wrongdoing in a New York State civil lawsuit filed against him in May 2005, which is still pending. Then-New York Attorney General Eliot Spitzer dropped portions of the lawsuit in 2006 that included four other allegations tied to the investigation.