A major shake-up of the board at construction giant Leighton Holdings has been a long-time coming amid pressure from its major shareholder Hochtief, analysts say.
Chairman Stephen Johns and non-executive directors Wayne Osborn and Ian Macfarlane, a former Reserve Bank of Australia (RBA) governor, have tendered their resignations following a breakdown in relations with German construction company Hochtief, which owns a 40 per cent stake in Leighton.
"Their view is that Hochtief no longer supports an independent board at Leighton," the company said in a statement.
Hochtief, which is majority owned by Spanish Group ACS, has two representatives on what was the company's 10-person board.
The board departures come after the company conducted a review of its assets following a series of major cost blowouts on projects during 2011 and 2012.
Shares in Leighton fell eight per cent to $19.97 by 1400 AEDT.
IG Markets analyst Evan Lucas said there had been to-ing and fro-ing for some time between the Leighton board and Hochtief.
"Leighton's have had an overhang with the amount of capital expenditure they've had going out, deals falling through and therefore Hochtief has come back in saying the board isn't managing it the way we want it to," Mr Lucas said.
"It has been a long time coming with some sort of spill at the top end of Leighton."
Spanish Group ACS, which has a 40 per cent controlling stake in Hochtief, also had some input in how Leighton had been run over the past three years, he said.
It appeared to some that the chairman and directors had fallen on their swords following pressure from Hochtief, he said.
Meanwhile, Mr Lucas predicts Hochtief will continue to dabble in the company following a series of projects which came in over budget, particularly the disastrous Brisbane airport project.
In February Leighton announced it will sell 70 per cent of its telecommunications assets as part of its $885 million phone and internet infrastructure assets to the Ontario Teachers' Pension Plan.
Last week the National Broadband Network awarded $334 million of work to Leighton Holdings company Visionstream.Leighton said current arrangements with Hochtief were expected to continue and a board meeting will be held as soon as possible to elect a new chairman.
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