MARCONI AFFAIRS

Evening Post, Volume CXIII, Issue 55, 7 March 1927, Page 11

MARCONI AFFAIRS

BOARD'S PROPOSALS

REDUCTION OF CAPITAL

GENERAL RECONSTRUCTION

(United Press Association.—Copyright.) LONDON, sth March. ' The Board of the Marconi Company recommends a reduction of capital by 10s per share, after which it will be increased to four millions by the issue of 3,250,000 10s shares. The effect of the cancellation would be a reduction of £4,000,000 capital to £2,374,954. Signor Marconi has resigned from the chairmanship, and has been appointed president. The Marconi Company's directors explain that the reserves were raided in 1923-24 to the extent of £23,013,000 to I provide for the depreciation in assets. The draft accounts in 1925 showed that although the trading profits were £150,000, further writings down were necessary. Accordingly it was decided by Sir Gilbert Garnsey that a committee of accountants should investigate, especially the auditors' declaration that a proper valuation could not be placed on the investments since 1920. ' Sir Gilbert Garnsey recommendedthe additional porvision of £2,766,000, including £1,059,000 advanced to associated companies; £772,000 to shareholders associated with other companies,, and £373,000 for the obsolescence of plant Owing to the adoption of the beam. After the appropriation of the reserves credit balance In 1924 the deficiency amounted to £1,625,000. Accordingly a reduction in capital was necessary to prevent the continual revision of assets probably preventing a dividend for many years. REORGANISATION. If the recommendations are accepted a dividend will be possible for 1926, when the profits exceeded those of the previous year. It is proposed to wind up non-wireless companies which have no chaneo of prosperity, reorganise the management, concentrate on the manufacture and sale of broadcasting material, carry out beam wireless schemes, modernise the existing stations, and secure from the Government a license for wireless stations throughout the world.

The directors anticipate that South African and Indian beam stations will be opened within three months. The United States and South American stations will be opened this summer. The directors state that the Australian beam station will be open when the Post Office agrees to operate the British end. . •

Eecalling that Signor Marconi has repeatedly expressed his desire to resign the chairmanship in order to devote his energies to the technical side, the directors recommend his appointment to the presidentship, to enable him to give attention to the fullest to development work. Lord Inverforth, Lord Wester Wemyss, Sir Frederick bykes, Sir Coupar Barrie, and Colonel *. JJ. S. Balfour have been invited to join* the board.

The proposal'will bo submitted to the shareholders on 15th March. Replying to the English shareholders committee, the directors state that the present board is not responsible for the losses. On the contrary, it disposed of investments to which the English--committee objected. The present directors' remuneration for seven years totalled £107,417; including amounts paid to Signor Marconi as technical adviser, and to Mr. F. G. Kellaway managing director. '