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NPS backs Hyundai on dividends, appointments

Mar 15,2019
A panel of Korea’s state pension fund on Thursday sided with Hyundai Motor and its auto parts affiliate Hyundai Mobis’s proposals on dividends and appointments for board members, dealing a blow to hedge fund Elliott Management.

The decision is likely to help Hyundai Motor and its affiliate win the vote showdowns at the shareholders meeting slated for later this month.

The National Pension Service (NPS) is the second-largest shareholder in Hyundai Motor with an 8.7 percent stake. The NPS also owns a 9.45 percent in Hyundai Mobis.

The NPS is the largest institutional investor in Korea.

Earlier, Elliott Management proposed that the two firms pay a combined 8.3 trillion won ($7.3 billion) in dividends this year at the upcoming shareholders meetings.

Hyundai Motor and its affiliate rejected the calls and offered to pay 1.1 trillion won to shareholders this year, and Hyundai Mobis offered to deliver a total of 1.1 trillion won in dividends over the next three years.

Elliott, founded by billionaire Paul Singer, has been demanding that Hyundai Motor and its affiliate pay more dividends and fix their governance problems.

The NPS’s panel also voted against the U.S. fund’s proposed appointments for board member nominees for the two firms.

Hyundai Motor and Hyundai Mobis have been in a back-and-forth dispute with Elliott over their dividend plans and appointments for board members, with the New York-based hedge fund seeking to obtain seats on the key body.

All eyes are on the shareholders meeting on March 22, when investors in Hyundai Motor and Hyundai Mobis have a chance to vote on the proposals that have been forwarded so far.