UPDATE 1-Canadian auto parts maker Martinrea faces proxy battle
* Rea to propose five nominees to Martinrea's board
* Martinrea's stock has underperformed peers
* Rea filed lawsuit against Martinrea last year (Adds background on Nat Rea and on history of dispute, adds statement by Rea Holdings, analyst comments)
By Nicole Mordant
April 3 (Reuters) - A former executive of Martinrea International Inc intends to ask shareholders to replace a majority of the directors at the Canadian auto parts maker, accusing the board of a lack of independence and industry experience.
Rea Holdings, a Toronto-based holding company controlled by Nat Rea, a former president and deputy chairman of Martinrea, said on Thursday it intends to propose five nominees for election to the board, setting the stage for a proxy battle.
Rea, who sold his auto parts company, Rea International, in 2002 to what is now Martinrea, has been critical of the leadership of the Vaughan, Ontario-based company for some time. According to Martinrea, "his employment was terminated" in 2012.
Last September Rea and Rea Holdings brought a lawsuit against some Martinrea officials and directors alleging that they breached their fiduciary duties regarding some payments to suppliers and customers. The company has rejected the allegations and counter-sued.
"The incumbent board and management of Martinrea is deeply entrenched, with recent additions of individuals chosen to provide the appearance of board renewal," Rea Holdings said in a news release on Thursday. Continued...