Activist Elliott demands Hyundai Motor encourage cumulative voting

SEOUL, April 25 (Yonhap) -- U.S. activist fund Elliott Management has demanded Hyundai Motor Co. and its two affiliates remove a clause that makes it possible for the three firms to avoid a cumulative voting system to pick board members, an industry source said Wednesday.

Elliott Management, which revealed earlier this month that it holds more than US$1 billion worth of stocks in the three key units of Hyundai Motor Group, has called for the South Korean auto conglomerate to adopt a holding company structure and do more for minority shareholders.

A cumulative voting system permits minority shareholders to transfer rights to a member of the board of directors, thus reining in power abuses by controlling stockholders and top managers.

Elliott Advisors Ltd., a unit of Elliott Management Corp., has sent a letter to the board of directors of Hyundai Motor Group containing four suggestions for an improved corporate structure.

In the letter, the U.S. fund suggested a holding company structure for the Korean auto giant if it wants to be a truly global carmaker. It recommended combining Hyundai Motor and Hyundai Mobis.

Elliott also asked the group to reduce excess cash on the balance sheet at Hyundai Motor and Hyundai Mobis and cancel all existing and future treasury shares in the two companies to enhance shareholder value.
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