Weinstock to oppose re-election of Marconi executives

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The Independent Online

Lord Weinstock is set to clash directly with the board of Marconi by voting against the re-election of at least two non-executive directors at the company's annual meeting next week.

The former managing director of GEC, which turned itself into Marconi two years ago, will not be present personally at next Wednesday's AGM at the QE2 Centre in London because of health problems linked with a bad back.

But he hopes to spark a shareholder revolt by opposing the reappointment of Sir Alan Rudge and the former US ambassador to London, Raymond Seitz, the two Marconi non-executives standing for re-election. Lord Weinstock also wants Sir Roger Hurn replaced as non-executive chairman. News of Lord Weinstock's move emerged as one of the three candidates he had lined up to succeed Lord Simpson as chief executive, the former Energis chief executive Mike Grabiner, ruled himself out.

Another potential candidate is Peter Gershon, a long-time colleague of Lord Weinstock's who ran Marconi Electronic Systems and is now in charge of the Office of Government Commerce. Mr Gershon has not yet been aproached.

Lord Weinstock, who owns 40 million shares in Marconi, holds Sir Roger and the other non-executives responsible for the botched profits warning 10 days ago, which resulted in the share price more than halving. John Mayo, the chief executive designate, was forced to quit two days later.

A friend of Lord Weinstock said: "There are two crises at Marconi. One is the crisis in the business and the other is the crisis caused by the way the profit warning was handled. The share price need not have fallen that much, and shareholders have a right now to seek retribution."

Lord Weinstock, who ran GEC for 33 years, is furious with the way he believes the current management has squandered their inheritance. He has achieved three of his four demands with the removal of Mr Mayo, the failure of Lord Simpson to step up to the chairman's job and the abandonment of Marconi's plans to halve the exercise price of executive share options. "Now there is only one demand left to meet and that is a new chief executive," a friend of the peer's said.

Marconi sources poured scorn, however, on Lord Weinstock's attempts to unseat Lord Simpson, likening him to a dying Plantagenet king trying to engineer the succession to the throne. "He is not on the board and has no legal responsibilities, but he is behaving as if he chaired the nomination committee, one said. "George will stay as long as it takes to fix the business. The management succession will definitely not be an issue before next year."

Outlook, page 21

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