U.S. activist hedge fund Elliott Management, which recently disclosed its $1 billion interest in Hyundai Motor Group stocks, made specific demands to reorganize Korea’s second largest conglomerate to generate greater returns for shareholders, having drawn similar changes from Samsung Electronics.

Elliott Advisors Hong Kong, a unit of the New York-based investment firm, said in a statement on Monday it welcomed the Korean auto giant’s proposed restructuring plan, but that “the unwinding of the current circular shareholding by itself… lacks clear benefits to minority shareholders.”

Under the so-called Accelerate Hyundai Proposals, the hedge fund pressed the conglomerate to go beyond reorganizing Hyundai Mobis by merging the auto parts maker with the parent finished car maker Hyundai Motor.

Elliott said the merger should then lead to a demerger into a single holding entity that would command over the operation unit of a single producer in charge of supplying parts to finished vehicles from Hyundai and Kia Motors as well as auto financing or steel units currently under Hyundai Motor arm.

Additionally, it demanded the conglomerate cancel all treasury shares, up the dividend payout ratio to 40 to 50 percent against net profit, and seat three outside directors with multinational experience.

The hedge fund announced early this month it holds more than $1 billion worth of shares in the group’s three key affiliates - Hyundai Motor, Kia Motors, and Hyundai Mobis.

Last month, Hyundai set out to untangle its complex shareholding ties by spinning off businesses of Hyundai Mobis and merging them with logistics firm Hyundai Glovis. The move, while simplifying the group structure by turning Hyundai Mobis into a de facto holding unit, is also widely viewed as a step to transfer power from 80-year-old chair Chung Mong-koo to his 48-year-old son and vice chair Chung Eui-sun.

Market observers say a transition to a holding company structure would significantly impede the auto group’s pursuit of large-scale investments and M&As. They also believe Elliott is ratcheting up its assertiveness to gain influence over other shareholders at the Sunday meeting that will vote on the merger outline. Elliott may also be holding expectations that higher shareholder returns could boost the prices of its shares. The fund does not hold any shares in Hyundai Glovis.

Shares of Hyundai Motor closed Tuesday up 1.88 percent at 162,500 won ($150.88) and Kia Motors up 0.16 percent at 31,400 won. Hyundai Mobis shares also gained 0.62 percent to 245,000 won while Hyundai Glovis shares slipped 0.85 percent to 175,500 won.

Hyundai Motor said it will continue to communicate with domestic and foreign shareholders on its reorganization scheme.

Samsung Electronics, after facing similar pressure from Elliott, carried out a massive shareholder return program, including a 9.2 trillion won buyout and cancellation plan and 5.8 trillion won dividend payout. Next week, it will be introducing new shares after a 50-to-1 stock split.

By Kim Jung-hwan and Kim Hyo-jin

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