Weinstock's Marconi pension at risk

LORD Weinstock, who has watched the GEC empire he created plunge towards collapse as Marconi, risks losing his £341,644-a-year pension.

He did not join the old GEC pension fund. Instead, before he retired he negotiated a pension paid by Marconi itself. Now its disastrous ventures in telecoms equipment have brought it to the edge of ruin. And if it goes into receivership, Weinstock will be treated like any trade creditor, Financial Mail has discovered.

To make matters worse, the men he blames for the disaster - former chief executive Lord Simpson and his deputy John Mayo - both had special pension funds created to insulate them from any collapse. Marconi pumped an extra £2m into their funds when they left in disgrace last year.

Marconi is negotiating with banks and bondholders owed £4.3bn despite massive cost-cutting and asset sales. It wants them to swap their debt for equity. This would keep the firm going, but the issue of so many new shares would virtually wipe out the value of the present shareholders' stakes.

Receivership would be a double whammy for Weinstock because a big part of his personal wealth is in Marconi shares. His stake was once worth £370m - more than Marconi's entire market capitalisation today.

But Amicus/MSF union head Roger Lyons has little sympathy. He said: 'He was a predator who clawed billions out of the pension schemes of GEC's takeover targets. And when that was made illegal he merged schemes into the GEC fund and used surpluses to take pension holidays that benefited the firm. He also sacked thousands of workers and created even bigger surpluses. Yet now the Marconi scheme is £137m short.'

A Marconi spokesman agreed that Weinstock could lose his pension, but said: 'That is in the event of a worst-case scenario, which is all anyone ever seems to talk about. We are confident the talks will produce the right result. The main pension scheme underfunding will be addressed over 12 years.'