*

Building group's chair and two directors voted out by

shareholders

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Investors angry about its $8.8 billion takeover of US

group AZEK

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James Hardie shareholders were not able to vote on deal

after

ASX waiver

By Scott Murdoch

SYDNEY, Oct 30 (Reuters) - James Hardie

shareholders are demanding the company appoint directors quickly

to rebuild trust in the embattled building group after its chair

and two directors were dumped by investors angry about its $8.8

billion takeover of AZEK.

Chair Anne Lloyd and directors Rada Rodriguez and Peter-John

Davis will leave the board after a majority of investors voted

against them at Wednesday's annual meeting.

James Hardie's Australian-listed shares opened 4.5% lower on

Thursday, while the S&P/ASX200 index was down about 0.3%

in early trading.

The unprecedented board purge at a large Australian-listed

company followed James Hardie's decision to seek a waiver from

the Australian Securities Exchange that meant its shareholders

did not vote on the AZEK takeover. The ASX is revising its rules

after sustained pressure from investors following the deal.

Founded in Australia and considered one of the nation's

oldest businesses, James Hardie is now domiciled in Dublin and

listed on the Australian and U.S. exchanges.

Investors criticised James Hardie for buying U.S.-based

building products group AZEK at a time when the country's

property market remains volatile. A major share issuance to fund

the takeover also angered investors because it would dilute

their holdings.

"We did vote against the chair, the board lost the trust of

the shareholders by treating them with utter disdain through the

AZEK deal," said Prasad Patkar, Platypus Asset Management's head

of investments.

"The new appointments to the board and chair will be a good

signal to shareholders on whether the company intends to take

the message delivered at the AGM today seriously or not."

Lloyd told James Hardie's annual meeting in Dublin the

company would work towards soon announcing a new chair and

directors. She said the company would engage with its investors

on the negative feedback given through the votes.

James Hardie's Australian and U.S.-listed shares are down

about 30% so far this year.

"The board and management can go one of two ways, try and

live in the real world and try and engage with its owners and

rebuild trust," said Raaz Bhuyan, portfolio manager at WaveStone

Capital, which voted against Lloyd at the meeting.

"The other approach would be to have their heads in the

sand," he said. "The path to redemption is to respect the

company's owners."