Glass Lewis, one of the world’s two largest proxy advisory firms, has advised shareholders to vote against the restructuring plan of Hyundai Mobis.
Glass Lewis is the first major proxy advisory firm to express its opposition to Hyundai Motor Group’s governance reform plan.
The plan proposes that Hyundai Mobis transfer its lucrative module and after-sales parts business units to Hyundai Glovis.
Glass Lewis criticized that the governance reform plan of the Hyundai Motor Group is based on a suspicious business logic and insufficient valuation. The firm also pointed out that the grounds for the division of Hyundai Mobis are not convincing and are advantageous only for Hyundai Glovis shareholders.
This criticism echoes the views of Elliott Management and local proxy advisory firm Sustinvest.
Following Glass Lewis, other major proxy advisory firms, including the Institutional Shareholder Services (ISS), the world's largest proxy advisory firm, and the Korea Corporate Governance Service (KCGS) are set to present their opinions.
The opinions of these institutions are likely to carry significant influence on foreign investors and institutional investors, including the National Pension Service (NPS).
With the hyundai Mobis shareholders’ meeting around the corner, both sides are trying to secure support from shareholders. Hyundai Mobis is currently meeting with local and foreign shareholders, explaining the legitimacy of the restructuring plan.
In a recent announcement, it asked them to vote for the reform plan so that the group can better respond to technological and market changes and enhance its governance transparency. Elliott Management is seeking to gather support from overseas shareholders.
For the division of Hyundai Mobis, at least one-third of the shareholders who have shares with voting rights should participate and at least two-thirds of the participating shares should agree. At present, 30.1% of the shareholders are favorable to the Hyundai Motor Group, and it is the NPS and foreign investors, holding 9.83% and approximately 48% each, that hold the key.