Elliott Advisors, a unit of US activist hedge fund Elliott Management, said Wednesday it holds more than a $1 billion stake in Hyundai Motor Group and urged the country’s leading automotive group to share detailed plans to improve the balance sheets and returns to shareholders.

This comes a week after Hyundai Motor Group’s announcement for a grand governance reform to streamline its complex cross-sharing structure in response to mounting pressure from the government.

While welcoming Hyundai’s first step for reform, Elliott Advisors asked the company to present “a more detailed roadmap as to how it will improve corporate governance, optimize balance sheets, and enhance capital returns at each of the companies.”

Elliott Advisors said it owns over $1 billion in combined shares of Hyundai Motor, Kia Motors and the Hyundai Mobis, which are estimated at less than 1 percent of the three companies.

“Hyundai Motor will continue efforts to heighten investors’ benefit and the value of our company, while improving communication with shareholders here and overseas,” Hyundai Motor said in a statement in response to Elliott Advisors’ disclosure.

“We may see more large hedge funds making such requests to Korean companies due to a significant increase in foreign investment and the government‘s drive to overhaul the governance structure of conglomerates,“ said Lee Ho-geun, a professor of automotive engineering at Daeduk University. 

By Kim Bo-gyung (lisakim425@heraldcorp.com)