Truston throws weight behind Hyundai plan

Korean investment firm Truston Asset Management voted in favor of Hyundai Motor Group’s corporate restructuring plan on Thursday evening, saying that the plan is expected to enhance shareholder value and resolve the controversial cross-shareholding structure.

“We recently concluded in our internal meeting that Hyundai Motor’s plan to restructure corporate governance is advantageous to us as a shareholder and an investment company,” Truston Asset said in a statement Thursday.

Truston has a reputation as the bane of shareholder meetings across Korea. The investment company is infamous for frequently taking opposition positions - according to industry data, 10.2 percent of Truston’s votes between 2012 and 2017 were negative, the highest among domestic investment firms.

“There is no evidence that the planned spinoff and merger deteriorates shareholder value,” said the investment firm. “The spinoff conforms to domestic law and the merger righteously reflects the company’s value,” it added.

Truston Asset Management holds 0.19 percent of shares in Hyundai Mobis and 0.09 percent of shares in Hyundai Glovis.

“We respect the management’s solution because there isn’t a better option,” it said. “The spinoff complies with the capital market legal system and the spinoff ratio doesn’t damage the existing shareholder value,” it added.

Acknowledged for its research-based investment, Truston has managed several state funds in the past.

Hyundai Motor Group recently faced a major hurdle as two U.S. proxy advisers voted against the automaker’s overhaul plan. The Glass Lewis & Co. and Institutional Shareholder Service recently joined U.S. activist hedge fund Elliott in opposition of Hyundai Motor’s plan to spin off Hyundai Mobis’ after-sales service and module businesses to Hyundai Glovis.

While the automaker said the plan will resolve the cross-shareholding structure while enhancing the company’s competitiveness in future mobility, opposing investment firms believe the proposed plan will only solidify the control of the owner family.

The tug-of-war between the automaker and the American investors is likely to continue until May 29, when a final vote is scheduled to take place.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]