SEOUL (Reuters) - The head of auto parts maker Hyundai Mobis Co Ltd has rejected calls from a U.S. activist fund for the Hyundai Motor Group to set up a holding company structure, South Korea’s Maeil Business Newspaper said on Thursday.
Hyundai Motor Group in March unveiled reforms aimed at simplifying its complex ownership structure, but Elliott Management said they would not do enough to address Hyundai’s share price discount to overseas automakers.
Elliott said the Hyundai Motor Group should combine Hyundai Mobis with Hyundai Motor to create a holding company instead.
But Hyundai Mobis’s (012330.KS) CEO said businesses such as components and car making should be kept apart.
“A management structure reorganization plan claimed by Elliott can hurt competitiveness of the automotive group’s businesses so it is difficult to adopt it,” Lim Young-deuk told Maeil Business Newspaper in an interview.
Ahead of Hyundai’s plan being put to a shareholder vote on May 29, the U.S. fund called on the autos-to-steel group to introduce a holding company structure, boost shareholder returns and appoint more independent board members.
Elliott proposed Hyundai Mobis be combined with Hyundai Motor Co (005380.KS) to create a holding company that would also include financial subsidies such as Hyundai Capital and Hyundai Card Co Ltd [HYMTRH.UL]
Elliott says it holds over 1.5 percent of common shares in Hyundai Mobis.
Reporting by Ju-min Park; Editing by Mark Potter