Outside experts to decide whether to OK Hyundai's overhaul program
Outside experts to decide whether to OK Hyundai's overhaul program
  • Kim Jung-mi
  • 승인 2018.05.19 06:58
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South Korea's national pension fund has decided to ask its outside experts to exercise voting rights over whether to approve Hyundai Motor Group's corporate governance overhaul program later this month, an official said Friday.

The National Pension Service made the decision earlier in the day, said an official handling the issue at the Ministry of Health and Welfare, which oversees the world's third-largest pension fund. The official asked not to be identified, citing policy.

The fund's internal investment committee can refer a sensitive case to the expert committee -- composed of seven college professors and an economic research fellow -- which can then exercise fund's voting rights.

Repeated calls to the expert committee chairman seeking comment went unanswered on Friday.

The fund's decision is apparently intended to dispel any controversy over whether to approve or reject a high-profile spinoff merger plan between auto parts supplier Hyundai Mobis Co. and logistics affiliate Hyundai Glovis Co.

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

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

Still, some critics claim that the overhaul program is designed to lay the groundwork for a power transfer of the automaking giant from Hyundai Motor Group Chairman Chung Mong-koo to his son, Vice Chairman Chung Eui-sun.

Hyundai Motor Group is facing an uphill battle against U.S. hedge fund Elliott and U.S. proxy advisers Glass Lewis and ISS, which have recommended derailment of the ownership reorganization plan on the grounds that Mobis shareholders won't benefit from the plan.

Foreign investors held a combined 48.6 percent stake in Hyundai Mobis as of April 12, while Chairman Chung and three Hyundai affiliates had 30.2 percent.

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

South Korea's national pension fund owns a 9.8 percent stake in Hyundai Mobis, making it a critical player in determining whether Hyundai Motor Group can go ahead with its corporate governance overhaul program.

Hyundai said it had no immediate comment on the pension fund's decision as it vowed to continue to persuade its shareholders to get approval for its corporate governance overhaul program at shareholders' meetings both at Mobis and Glovis on May 29.

The deal can pass if two-thirds of shareholders vote in favor of the motion. (Yonhap)

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