(Bloomberg) -- The former head of Gildan Activewear Inc. pushed the board to back a strategy of major acquisitions before he was forced out, a company director said, shedding new light on the power struggle at the Canadian clothing manufacturer. 

The board of Gildan, owner of the American Apparel brand, has been under pressure since announcing last Monday that it was replacing longtime Chief Executive Officer Glenn Chamandy with a former Fruit of the Loom executive, Vince Tyra. Several large investors have since rallied to Chamandy’s side, criticizing the abrupt change in leadership and calling for the 62-year-old’s reinstatement.

Those shareholders don’t understand that Chamandy gave an ultimatum that he would quit unless the board agreed to work toward a significant acquisition, Gildan Director Luc Jobin said in an interview Sunday. 

Jobin declined to name any specific deal targets, but said the proposal would have taken Gildan outside its main focus on textile manufacturing and left it carrying a larger debt load. The company has a stock market value of nearly C$8 billion ($6 billion).

“Back in October, we reviewed our long-term strategic plan. We were confronted with an inorganic strategy which the CEO brought forward and entailed multibillion-dollar acquisitions outside of Gildan’s core of manufacturing,” Jobin said.

“These acquisitions would have been highly dilutive to shareholders. They were very high risk. They needed a lot more work for the board to consider them seriously,” he added. 

When that message was delivered to Chamandy, the relationship between the CEO and the board broke down, Jobin said. “The level of good-faith engagement was no longer there.”

Chamandy could not be reached for comment Sunday. 

Read More: Gildan’s Deposed CEO Wins Over Big Investors in Fight With Board

Gildan’s board has been under intense scrutiny since it surprised the market with news of Chamandy’s departure, causing the stock price to dive. The Montreal-based company was founded by Chamandy’s family. 

Five investment firms — including Jarislowsky Fraser Ltd., Browning West LP and Pzena Investment Management Inc. — came out in opposition to the move, saying the board botched the succession process and Chamandy should be brought back. 

‘Nothing About Strategy’

Collectively, those five firms hold about 25% of Gildan’s shares, according to data compiled by Bloomberg, putting the group in a strong position if they want to seek a shareholder meeting to change the board. 

During an interview with Bloomberg on Friday, the former CEO was asked about his relationship with directors. “My relationship with the board was always very respectful and cordial,” Chamandy said. The dispute was about the process of choosing his eventual replacement, he said: “There was nothing about strategy or anything else other than the succession.” 

To shore up its position, the board is giving a seat to one of Gildan’s largest shareholders. 

Gildan said Sunday it’s appointing Chris Shackelton, managing partner of Coliseum Capital Management, to join as a director. Coliseum is Gildan’s second-largest holder with 6.6% of the stock, according to data compiled by Bloomberg, and it has agreed to vote those shares in support of Gildan’s board nominees over the next two years, the company said in a statement. Coliseum has also agreed to buy more shares, it said.  

“The board has taken all necessary actions, unfortunately, to unseat what we would describe as an entrenched CEO,” Jobin said. “We’ve done that for the long-term health of the company.”

(Updates with comment from Glenn Chamandy in the 11th paragraph. An earlier version corrected the spelling of Chris Shackelton’s name.)

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