[THE INVESTOR] More than 2,000 listed firms in Korea on May 16 condemned US activist hedge fund Elliott Management for interrupting Hyundai Motor Group’s government-approved reform efforts, calling on authorities to better protect their management rights.
“Korean companies are helpless with shareholder activism whose latest target is Hyundai Motor,” Jung Koo-yong, head of the Korea Listed Companies Association, told reporters after the lobby group for KOSPI firms along with the KOSDAQ Listed Companies Association, issued a statement earlier on the day.
Representatives of KOSPI and KOSDAQ firms speak at a press conference at the Korea Exchange in Seoul on May 16.
“It is nonsense that Elliott is attacking Hyundai’s governance reform plans that have already been reviewed positively by the nation’s authorities,” he said of the plans that have been touted by Fair Trade Commission Chairman Kim Sang-jo who has been leading the Moon Jae-in government’s chaebol reforms.
Chung stressed that the current laws are unfair to the largest shareholders, mostly founding members, which means many firms are vulnerable to attacks by activist funds seeking short-term profits.
The two associations urged the government to adopt protective measures for major shareholders like the so-called “poison pill” that discourages hostile takeovers by allowing a targeted firm to purchase additional shares at a discount and the “dual-class share system” giving major shareholders more voting rights.
By Park Ga-young (email@example.com)