Hedge fund Elliott says Hyundai has too much capital

Activist investor is seeking return of excess capital to shareholders

Elliott Management owns $1.5 billion (€1.33 billion) worth of shares in three Hyundai group companies. Photograph: Andrey Rudakov/Bloomberg
Elliott Management owns $1.5 billion (€1.33 billion) worth of shares in three Hyundai group companies. Photograph: Andrey Rudakov/Bloomberg

US hedge fund Elliott Management said on Tuesday Hyundai was holding excess capital and that shareholder returns from the Korean automotive group were lagging industry standards.

In a letter to the directors of the group, the fund called for return of excess capital to shareholders, a review of any and all non-core assets and addition of new independent directors to its respective boards.

Elliott Management owns $1.5 billion (€1.33 billion) worth of shares in three Hyundai group companies - Hyundai Motor Co, Kia Motors and auto-parts maker Hyundai Mobis Co.

The tussle between the hedge fund and the South Korean conglomerate over a potential revamp has been going on for long.

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The fund had in September called for a committee to review its restructuring proposals with other investors and experts, which was rejected by the board.

Elliott said on Tuesday that non-conforming reporting of cash flows is distorting and hiding the group’s true income from operations.

Elliott is an activist investment company that provides portfolio management and consulting services. It currently has about $18.4 billion of assets under management. The hedge fund has large holdings in a range of companies including Dell, Telecom Italia and Sanofi. – Reuters