Industry "Overcoming a decline in sales and income … demands excessive restructuring"
US Hedge fund Eliot Management continues the attack on Hyundai Motor Group. It was the third attack after the Hyundai Motor group was caught in May and was involved in a restructuring. Concerns increased that large affiliates such as Hyundai Motor, Kia Motors and Hyundai Mobis posted sharp 3Q earnings shock.
Eliot sent a letter to Hyundai Motor Group on the 13th, saying "Hyundai Motor Group is in serious capital excess," he demanded, "We want to return excess capital of up to 8 trillion won,
They also ordered the appointment of outside directors to suit their tastes. Eliot said, "We must increase the diversity of the Hyundai-Kia Automotive Group Board of Directors on the basis of an international career and appoint independent directors so that Hyundai Motor, Kia Motors, and the Hyundai Mobis Board of Directors will be able to combine overseas industry experience." We also instruct us to work with them to reform the corporate governance structure. Eliot stressed, "If the Hyundai-Kia Automotive Group does not respond appropriately, we will consider submitting the proposal to the next shareholder meeting."
The automaker said, "The Hyundai-Kia Automotive Group has met with bad news, such as sluggish sales and deteriorating revenues, but it is too demanding to buy back treasury shares." In addition, it is not in accordance with domestic law to consult with them before restructuring corporate governance. "
Eliot asked Hyundai Motor Group to appoint three independent directors for Hyundai Motor, Kia Motors, Hyundai Mobis and Hyundai Mobis. In addition, Hyundai Motor and Hyundai Mobis paid back capital and bought back shares. And review the strategic use of technology.
"Hyundai Motor and Hyundai Mobis have more than KRW 8 trillion and KRW 4 trillion in excess capital, respectively," Eliot said. I have to promise. "" We need to carry out a full and strategic review of non-core assets that continue to decline in shareholder returns, including the Gangnam site, which has not been developed since 2014. "
In the automotive industry, Eliot called for shallow shareholder returns and improved management styles, but it was analyzed that it was separate. That meant that the intention to intervene in the management of the Hyundai Group was reflected in the end. Eliot explained that the idea of "actively consulting with shareholders for corrective measures, such as appointing a new external director for each subsidiary board," was revealed.
Elliot said he had 3.0% stake in Hyundai Motor, 2.1% stake in Kia Motors and 2.5% stake in Hyundai Mobis. This is not the first time Eliot has attacked Hyundai Motor Group. In May, Hyundai Motor Group Corporation's corporate organization reorganization was canceled due to Eliot's objection. In September, Elliot combined Hyundai Motor with the Hyundai Mobis after-sales service (US) division, and proposed to combine the modules and core business of Hyundai Mobis with Hyundai Glovis.
Doh Byung Wook reporter [email protected]
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