James N. Smith, managing director of Elliott Advisors Hong Kong who led unsuccessful proxy battles against South Korea’s two largest family-run corporate empires Samsung Group and Hyundai Motor Group has offered to resign for unknown reasons, according to sources from the investment banking industry on Monday.

Smith spearheaded the activist fund’s campaigns against Hyundai Motor Group demanding the Korean conglomerate to improve its governance structure and enhance shareholder returns. He also took on Samsung Group in 2015 to stop the merger of Samsung C&T and Cheil Industries.

The New York-based hedge fund this year pressed Hyundai Motor Co. and its auto parts making affiliate Hyundai Mobis Co. to increase their dividend payout by nearly seven times – from 3,000 won ($2.65) per share to 21,697 won for Hyundai Motor and from 4,000 won to 26,399 won for Hyundai Mobis – arguing the companies had too much excess cash. However, 86 percent of shareholders of Hyundai Motor and 85.9 percent of Hyundai Mobis voted against Elliott’s proposal and sided with the Korean firms in their dividend proposals last month.

Shareholders also refused the outside board member nominations by Elliott and voted in favor of Hyundai’s recommendations: Yoon Chi-won, vice chairman of UBS Wealth Management; Eugene Ohr, former partner at Capital International; and Yi Sang-seung, economics professor at Seoul National University. The activist fund owns a 3.0 percent stake in Hyundai Motor and 2.5 percent in Hyundai Mobis.

It first waged its proxy war against Hyundai Motor Group last year opposing the country’s second-largest conglomerate’s plan to spin off Hyundai Mobis’ module and after-sales service business and merge them with Hyundai Glovis. The opposition rally led by Elliott successfully blocked the company’s plan in May last year, dealing a blow to the power transfer process of the family-owned business from the 80-year-old father, Chung Mong-koo, to his son, Vice Chairman Chung Euisun.

But since then, the New York-based activist fund has not been lucky with Hyundai.

In 2015, Elliott’s Hong Kong office headed by Smith also suggested the idea to challenge Samsung to stop the merger of its two affiliates Samsung C&T and Cheil Industry, claiming that it was designed to consolidate control of Jay Y. Lee, the group heir and vice chairman of Samsung Electronics. It said it owned a 7.12 percent stake in Samsung C&T. The battle also ended in the defeat of the U.S. fund as a majority of Samsung C&T shareholders voted in favor of the merger.

By Cho Si-young and Choi Mira

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