[Courtesy of Hyundai Mobis ]
SEOUL -- Hyundai Mobis, the parts-making affiliate of South Korea's top carmaker, promised Wednesday to write down shares worth 557 million US dollars in the next three years in a market-friendly move that followed growing demands from shareholders to improve corporate governance.
The company said its board approved plans to cancel stocks worth about 600 billion won (557 million US dollars) for three years through 2021 and deliver dividends to shareholders twice a year. Shareholders have received dividends once a year in March.
Hyundai Motor last week canceled 960 billion won worth of stocks. U.S. activist hedge fund Elliott Management welcomed it but urged the auto group to adopt a holding company structure. The fund also demanded Hyundai announce "actionable targets for balance sheet optimization, improved shareholder returns and board structures that ensure best-in-class corporate governance" across the group.
The auto group has vowed to streamline its governance structure by splitting the module manufacturing and after-sales parts business of Hyundai Mobis to combine it with Hyundai Glovis, a logistics unit. However, group owner Chung Mong-koo has been hesitant to introduce a holding company.
Elliott, which held more than 1.5 percent of the common stock in Hyundai Motor, Hyundai Mobis and Kia Motors, suggested a merger between Hyundai Motor and Mobis to create a holding company would result in a more efficient structure. South Korea's top antitrust regulator sided with Hyundai saying Elliott's demand violates a fair trade law which bans a holding company from controlling a financial affiliate.
reporter
Lim Chang-won
cwlim34@ajunews.com
![[FOCUS] Hyundai Motor urges shareholders support to head off challenges](https://image.ajunews.com/content/image/2018/05/17/20180517142509447730.jpg)
