Go Search Go Contents Go to bottom site map

Hyundai Motor says ISS opposition to overhaul plan 'deeply regrettable'

2018/05/16 11:38

Article View Option

SEOUL, May 16 (Yonhap) -- Hyundai Motor Group on Wednesday accused U.S. proxy advisor ISS of misleading the market by opposing its corporate governance overhaul program as it vowed to persuade investors to support the restructuring plan at a key shareholders' meetings set for later this month.

In March, the world's fifth-biggest automaking group announced that its auto parts supplier Hyundai Mobis Co., the group's de facto holding company, will spin off its domestic module and after-sales parts businesses and merge them with logistics affiliate Hyundai Glovis Co.

Hyundai Mobis plans to focus on further beefing up its core auto parts operations and research and development activities, as well as on developing future growth drivers like autonomous vehicles and connected cars, after the spinoff and merger.

"The transaction presents an attractive opportunity for the controlling shareholder to lay the groundwork for resolving the circular ownership issues within the group and the related party concerns at Glovis, while retaining firm control over group companies," ISS said in a recent report, according to Reuters news agency.

"In contrast, the rationale for unaffiliated Mobis shareholders to support this proposal appears less-than-compelling," it said.

ISS has joined the opposition campaign against Hyundai's ownership reorganization plan, which has been led by another U.S. proxy advisor Glass Lewis, U.S. hedge fund Elliott as well as South Korean proxy advisor Sustinvest.

On Wednesday, Hyundai Motor Group described ISS's decision to oppose the spinoff merger plan as "deeply regrettable," claiming that the U.S. proxy advisor made a serious mistake and is misleading the market.

This file photo shows corporate logo atop Hyundai Mobis Co.'s main office in southern Seoul (Yonhap) This file photo shows corporate logo atop Hyundai Mobis Co.'s main office in southern Seoul (Yonhap)

Hyundai Motor said also rejected ISS claim that the overhaul program would put Mobis shareholders at disadvantage.

"It appears certain that the overhaul program will be in the interest of Mobis shareholders," Hyundai Motor Group said in a statement.

An investor who has 100 shares of Hyundai Mobis would receive 79 shares of Hyundai Mobis and 61 shares of Hyundai Glovis in the event of the overhaul program being passed, which Hyundai Motor Group says would benefit the investor, given their current share prices as well as benefits of the growth of Mobis and Glovis.

Hyundai Motor Group said its proposed corporate governance overhaul is also meant to address the circular ownership and other regulatory issues.

Last month, Korea Fair Trade Commission Chairman Kim Sang-jo cited Hyundai Motor's case as "the most desirable" one for local conglomerates that are required to restructure their circular cross-shareholding structures largely aimed at strengthening family control.

Hyundai Motor Group vowed to continue persuading its shareholders to the end over its corporate governance overhaul program.

entropy@yna.co.kr

(END)

angloinfo.com