UPDATE 2-Canadian activewear Gildan's board rejects shareholder calls to reinstate CEO

(Adds Jarislowsky Fraser comment in paragraph 9)

By Savyata Mishra

Dec 20 (Reuters) - Canadian apparel maker Gildan Activewear's board on Wednesday backed its decision to remove Glenn Chamandy from the CEO role, after some big shareholders called for his return.

Eight investors, including hedge fund managers Browning West and Oakcliff Capital, have sent letters to the company's board expressing concerns over the leadership change as well as its invitation to a shareholder to join the board on certain conditions.

Browning West, in a letter earlier in the day, said it was prepared to reconstitute the board through a special shareholders meeting if Gildan continues to ignore the feedback of more than 33% of shareholders.

The board asked Chamandy to leave the company he co-founded on Dec. 11, without giving a specific reason. In its response to shareholder demands on Wednesday, Gildan's board cited his inability to find additional avenues of long-term organic growth.

The board also said it was "disappointed in Chamandy's attempts to inflict the maximum amount of disruption to Gildan's business in order to remain as CEO" and pointed to his October proposal "to pursue high-risk and highly dilutive multibillion-dollar acquisitions".

Chamandy, who was replaced by Vince Tyra last week, said in a statement on Monday that he had given "no ultimatum to Gildan's board with respect to any strategy or potential acquisitions".

Chamandy could not be reached for further comment.

It is a rare public spat in Canada between board and shareholders over a sudden ouster of a CEO.

Canadian asset manager Jarislowsky Fraser, with a little over 7% stake in Gildan, reiterated its stance against the board's decision, adding that Chamandy remained best positioned to lead the company.

Shareholders Pzena Investment Management and Oakcliff Capital did not immediately respond to requests for comment.

Earlier this week, Gildan offered a board seat to Chris Shackelton, a co-founder of Coliseum Capital Management, which is one of its top shareholders, in return for its support to the company's slate of board nominees at each of its annual shareholder meetings in 2024 and 2025. (Reporting by Savyata Mishra in Bengaluru; Editing by Anil D'Silva and Shounak Dasgupta)