Leighton, based in Sydney, was an independent company and if conflicts of interest arose, then independent directors would "act accordingly", Johns said at the time.

"This is pretty extreme action," said Jeremy Hook, who helps manage about A$250 million (HK$2 billion) as the investment director of TMS Capital. "Anyone who'd be appointed hereafter would find it very, very difficult to present a proper, independent approach."

Christian Gerhardus, an Essen, Germany-based spokesman for Hochtief, did not immediately reply to an e-mail sent outside office hours seeking comment. A call to his office telephone was not answered.

Hochtief has been a shareholder in Leighton since 1981 and holds 53 per cent of the Sydney-based company's shares, according to its website. The stock dropped as much as 7.1 per cent, the most since April 14, 2011, and closed A$1.50 lower at A$20.20 yesterday.

Ian Macfarlane, a former governor of the Reserve Bank of Australia, and Wayne Osborn, also stepped down from the 10-person board.

Osborn is also chairman of Leighton's Theiss mining services business and the head of Alcoa's Australian unit, according to data.

The departures "should be taken as a real shock", said Simon Fitzgerald, a Sydney-based analyst at Moelis.

"Time will tell if there is anything more behind this, but given the company's history, investors are going to be nervous."

Justin Grogan, a spokesman for the company, did not immediately reply to a message and e-mail seeking contacts for the directors who resigned.

"Leighton operates under an independent board and management," the company said yesterday. "Leighton believes these governance arrangements, which have been in place for a long period, have contributed substantially to the value created for all of Leighton's 57,000 shareholders."

The board will convene as soon as possible to elect a new chairman, the company said. Directors of Hochtief and ACS hold three of the eight non-executive director seats on the board.

Leighton has aligned more closely with Hochtief and ACS over the past year. It moved its financial year end to December and added the Spanish company's construction head Marcelino Fernandez Verdes to its board.

Moody's in October 2011 dropped Leighton's credit rating to Baa2 with a stable outlook, referencing the influence of Leighton's shareholder structure on its credit position.

The interests of Hochtief, and ACS through Hochtief, are not perfectly aligned with the interests of minority shareholders in Leighton, the ratings company had said.

The rating would be pressured if there were signs that Leighton was losing its operational independence, particularly around setting dividends, Moody's said.

Leighton's business in Australia accounts for just under half of Hochtief's €25 billion (HK$250 billion) in revenue, according to data, and is home to about 35 per cent of its assets.

"While it is way too early to suggest that Leighton could be subject to a degree of potential capital stripping by the majority shareholder Hochtief/ACS, that issue will certainly now receive greater attention from investors," said Michael Bush, the head of credit research at National Australia Bank in Sydney.,

"It will also attract the attention of the rating agencies."