Vocus Communications boss Geoff Horth has survived a proposal to remove him from the helm of the firm by Perth venture capitalist Anthony Grist and Vocus founder James Spenceley.
The bid to oust Mr Horth, less than a month after chief financial officer Rick Correll resigned, was instigated by non-executive director Mr Grist, whose confidential proposal to the board was supported by executive director Mr Spenceley.
The pair proposed that Mr Horth should step down in early 2017, and the board's leadership be formally reviewed over the course of the year.
Mr Grist in August sold nearly $10 million worth of shares in Vocus, equal to about one third of his stake in the business at the time, while Mr Spenceley sold 75 per cent of his shares to pocket $26.6 million.
Four out of the remaining six Vocus board members are M2 representatives.
"While it is disappointing to see the departing directors leave the board, these resignations are in the best interests of shareholders so we can now move forward with a fully cohesive board and executive team," Mr Spence said.
Mr Horth was appointed CEO in February following the company's $3.75 billion merger with M2 Group, where he had been CEO since 2011, while Mr Grist was appointed to the board when Vocus acquired Perth-based Amcom Telecommunications in late 2014.
Vocus ranks fourth in size behind industry heavyweights Telstra, Optus and TPG Telecom.
In June, Vocus bought Nextgen Group, plus two development projects, for up to $861 million, to bolster its telecommunications infrastructure and earnings. Vocus funded the Nextgen deal deal via a $652 million capital raising, plus existing debt.
Mr Spence said at the time of the M2 merger, shareholders were presented with a leadership team and strategy they fully supported, which was only recently reinforced with the Nextgen acquisition and raisings.
IG market strategist Evan Lucas said news of the bid to oust Mr Horth has rattled investors, particularly given the company is still completing its merger.
"It doesn't bode well when you have infighting at the top because it (merger intergration) does require a lot of strategy, and a lot of will and and a lot of management's time and effort, " Mr Lucas said.
Vocus shares were down 23 cents, or 4.1 per cent, at $5.40 in a lower Australian share market at 9am.
Vocus said the merger with M2 is proceeding as planned and its $40 million synergy target is on track to be delivered by the end of 2017-18.
The acquisition of Nextgen is expected to be completed this month, and integration planning is on track.