Weinstock backs Simpson to stay on as Marconi's CEO

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Marconi shareholders were yesterday still pushing for a board shake-up, even though the company's recent profits warning has already forced the resignation of John Mayo, deputy chief executive.

"I'm still very much of the view that a new non-executive chairman is required," said one shareholder who did not want to be named. "I think that the company will now be initiating a search for a new chief executive who will work with a new non-executive chairman."

Lord Simpson of Dunkeld, the company's chief executive, has tried to restore confidence by buying 166,394 shares in the business, the company said yesterday. The purchase for 104p a share boosted his personal holding to 300,000 shares.

He also won support from his predecessor Lord Weinstock, who said he would vote for Lord Simpson's reappointment at the company's 18 July annual general meeting.

"I want to make clear my support for Lord Simpson's proper decision in the difficult current situation to continue as chief executive," Lord Weinstock' statement said.

Nevertheless, the telecoms sector was still reeling, having been dealt a fresh blow by Nokia, the Finnish mobile phone giant, which said it would stop supplying equipment to Telsim, a Turkish mobile phone operator, after it failed to repay a $240m (£170.5m )tranche of vendor financing.

The company owes Nokia $719m. Nokia shares lost 3.9 per cent to 22.10 euros.

But shares in Marconi, which collapsed last week, closed up 7.18 per cent at 112p yesterday – the biggest riser in the FTSE 100 index.

Last week, investors were demanding that the company find an independent chairman since, under the original plan, Lord Simpson was to take over from Sir Roger Hurn as chairman after the company's AGM, while Mr Mayo was to step up to chief executive. After Mr Mayo's resignation late on Friday, Marconi announced that both Lord Simpson and Sir Roger would continue in their current roles.