(Corrects July 24 story to show name is Justin Chinyata and not Vincent Rague in para 11)
* Group Five appoints eight new board members
* Former CEO returns as a non-exec director
* Shares fall more than 3 percent
By Nqobile Dludla
JOHANNESBURG, July 24 (Reuters) - South African construction company Group Five GRFJ.J on Monday appointed eight new non-executive directors at an extraordinary general meeting as part of a board overhaul following pressure from its largest shareholder Allan Gray.
The eight, five of whom were nominated by Allan Gray, include Group Five's former chief executive Michael Upton who resigned in 2014.
Fund manager Allan Gray, which owns 25 percent of Group Five, in May requested the extraordinary general meeting to reconstitute the board following a disagreement with the company on the future direction of the company. than 10 executive and non-executive directors have resigned since early this year. Chief Executive Eric Vemer quit in February after the company reported its first six-month loss in 11 years due to a 255 million rand ($19 million) settlement with the government and weakness in orders in its main engineering and construction business.
South Africa's construction industry has slowed sharply since the 2010 FIFA World Cup as infrastructure spending by President Jacob Zuma's government has stalled and weak commodity prices have hit demand from the mining industry.
At the extraordinary general meeting on Monday, shareholders also voted in as non-executive directors Cora Fernandez, Thabo Kgogo, Edward Williams, Reitumetse Huntley, Nazeem Martin, Nonyameko Madindi and John Job.
"We're very pleased that this process has now been concluded, the company can now actually move forward with the very challenging business environment that they are contending with," Allan Gray's portfolio manager Leonard Kruger told Reuters on the sidelines of the EMG.
"We look forward to working with the new non-executives as well as the executives to steady the ship in Group Five and move them forward."
Outgoing Chairwoman Philisiwe Mthethwa, who along with four other non-executive directors announced her resignation in June, said she believed "that the management team in place will steer the business back to profitability".
But some board members questioned Allan Gray's motive for an overhaul.
"It's very clear Allan Gray wants to have their cake and eat it," outgoing non-executive director Justin Chinyata told shareholders.
Mthethwa said one reason Allan Gray had called for an overhaul was the board's "refusal to entertain discussions to unbundle the group and sell off assets", which include the company's investments and concessions business.
"Such a transaction will not be in the interest of the stakeholders of the company and will likely result in significant value destruction and job losses," Mthethwa told shareholders.
Allan Gray's Kruger said his firm had never asked for an assets spin-off.
Shares in Group Five closed 3.34 percent lower at 19.10 rand. The share price has fallen by 1.22 percent in the last year.