U.S. activist hedge fund Elliott Management rejected Hyundai Motor Group’s restructuring plan as insufficient on Monday and called on the South Korean conglomerate to embrace a holding company plan and appoint more independent board members.
Elliott disclosed recently that it holds over $1 billion worth of shares in three major affiliates of Hyundai Motor Group and called for a “more detailed roadmap” on how the group will enhance corporate governance, optimize balance sheets and improve capital returns.
Stepping up its campaign against the automaker, Elliott stated it was not clear how the group’s restructuring plan would be an advantage for minority shareholders.
The giant autos-to-steel group in March announced a plan to streamline its ownership structure, answering calls from the government and investors for more transparency and better governance at family-controlled conglomerates, or chaebols.
“Elliott is encouraged that the Group has acknowledged the need for an improved ownership structure. However, the unwinding of the current circular shareholding by itself… lacks clear benefits to minority shareholders,” Elliott stated.
It stated it holds over 1.5 percent of the common shares in every of the three key affiliates of the nation’s No.2 conglomerate – Hyundai Mobis, Hyundai Motor and Kia Motors.
Hyundai stated that it would continue to communicate with investors consisting of Elliott to describe the goals and requirements of its reorganization plan.