Marconi chiefs prepare for roasting

Lord Simpson: Facing a stormy meeting

Under-fire bosses at Marconi are steeling themselves for a roasting from shareholders, as rumours mount of efforts to spill further boardroom blood.

Directors at the beleaguered telecoms equipment firm are set to come under further pressure on Wednesday over the handling of a profits warning which prompted a halving in the firm's share price.

Marconi chairman Sir Roger Hurn wrote to shareholders last week, reaffirming his faith in Marconi's future and restating the extension to Lord Simpson's tenure as chief executive.

While Lord Simpson had intended to swap his role for chairmanship, the ousting of his intended successor, John Mayo, following the share price debacle forced a reshuffle rethink.

But many shareholders, who have seen the prices of Marconi stock tumble 90% in little more than a year and from 245p two weeks ago to close at 109p on Monday, are reported to be hungry for further boardroom sacrifices.

Directors targeted

Supporters of Lord Weinstock, the man credited with building up the GEC/Marconi empire, are said to be ready on Wednesday to oppose the re-election of two non-executive directors, former British Telecom executive Sir Alan Rudge, and Raymond Seitz, a former US ambassador to London.

Lord Weinstock, a major shareholder, is also reported to be keen to replace Lord Simpson with Peter Gershon, a former head at Marconi Electronic Systems who now advises the government on its procurement budget.

The rumours have angered bosses at Marconi, who believe the quality of its factories, workers and technology will underpin future profits.

"Marconi is getting fed up with Weinstock," a friend of Weinstock told The Observer newspaper.

Key appearance

Tension at Wednesday's meeting is set to be heightened by the possible appearance of Mr Mayo, who still owns 365,000 shares, and is blamed by many observers for the firm's strategy of focusing on the telecoms equipment market, leaving it exposed to the downturn in the sector.

He bought 200,000 of the shares at 111p on 5 July, the day the stock tumbled, in an effort to reinstall confidence in Marconi.

His resignation was announced the next day as the firm sought to "optimise its operational performance".

Lord Simpson himself bought 166,000 shares at 104p last Monday.

In its profits warning two weeks ago, Marconi announced the loss of 4,000 jobs worldwide.

In the UK, cuts will fall mainly at Coventry and Liverpool plans, with a Poole site closed.