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The Korea Herald
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THE INVESTOR
March 29, 2024

Automobiles

FTC chief calls Elliott's demands 'illegal'

  • PUBLISHED :April 26, 2018 - 16:38
  • UPDATED :April 26, 2018 - 17:14
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[THE INVESTOR] The chief of Korea’s antitrust watchdog said on April 26 that US activist fund Elliott Management’s latest demand to create a holding firm structure at Hyundai Motor Group breaches local laws.

“Elliott’s demand for a holding firm structure at Hyundai Motor is unreasonable,” chairman of the Fair Trade Commission Chairman Kim Sang-jo told reporters at an industry meeting in Seoul, pointing out the automaker could violate the fair trade law separating banking and commerce if it accepts the demand. 

Kim’s remarks came after Elliott Management proposed Hyundai Motor to merge with parts-making affiliate Hyundai Mobis to form a holding firm that oversees the overall auto group, dismissing Hyundai’s original restructuring plan. 


FTC Chairman Kim Sang-jo



Related:
Hyundai, rethink the holding company: Elliott
Same Elliott, different situation: FSC chief


Under Elliott’s proposal, Hyundai’s two financial units Hyundai Capital and Hyundai Card will also go under the holding firm. Korean fair trade law prohibits a holding company from owning stocks of financial firms. 

Earlier in March, Hyundai Motor announced a governance overhaul, which was devised to streamline its complex ownership structure on persistent calls from the FTC. Under the plans, Hyundai said it will spin off module manufacturing and after-sales business of Hyundai Mobis to merge them with logistics unit Hyundai Glovis. 

After the announcement, Kim, known as “chaebol sniper,” welcomed Hyundai’s move as “the most desirable” among local conglomerates, adding “it was the right decision at the right time.” 

Elliott Management has been pressing Hyundai for a “more detailed roadmap,” while revealing it holds US$1 billion stake in the auto giant’s key affiliates Hyundai Motor, Kia Motors and Hyundai Mobis.

By Ahn Sung-mi (sahn@heraldcorp.com)

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