(Bloomberg) -- Hyundai Motor Group prevailed over Elliott Management Corp. in a hotly contested proxy fight over dividends and board reforms, a year after the hedge fund successfully blocked an $8.8 billion merger planned by the South Korean conglomerate.

Shareholders of Hyundai Motor Co. and Hyundai Mobis Co. on Friday rejected Elliott’s calls for $6 billion in one-time payouts and a board shake-up, voting instead in favor of dividends and independent directors proposed by the two firms. The companies announced the outcome of the meeting in Seoul on Friday.

The results could pave the way for Hyundai Motor’s chairman-in-waiting Euisun Chung to move ahead with his push to invest billions of dollars in future technology as well as a group restructuring that was derailed by billionaire Paul Singer-led Elliott. It’s also the second defeat for the New York-based activist investor in Asia’s fourth-largest economy since it lost a fight with the Samsung Group in 2015.

Elliott holds about 3 percent in Hyundai Motor and 2.6 percent in Mobis. In a letter to shareholders a day before the voting, the New York-based hedge fund said it’s “pleased to observe a growing consensus on the need for real, lasting change” at Hyundai Motor Group. While the reforms initiated by a part of the group are a “small step in the right direction,” the management “has not taken the necessary measures to match the scale of the group’s issues,” it said.

In a small win for Elliott, shareholders passed a resolution proposed by the fund to set up committees to steer director compensation, corporate governance and communication.

As for Hyundai Mobis, the biggest shareholder of Hyundai Motor, the most contentious issue was Elliott’s proposal to expand the board to 11 members from nine. Only about 21 percent of the shareholders voted for that resolution, which needed a two-third majority to succeed.

Hyundai Motor shares slipped 0.8 percent as of 11:07 a.m. in Seoul, while Mobis shares advanced 0.7 percent.

Earlier this month, shareholder advisory firms including Glass Lewis & Co. and Institutional Shareholder Services Inc. told investors to vote against the one-time dividends Elliott was seeking. They argued Hyundai needs the cash for investment as the global auto industry races to develop electric, self-driving and flying cars. However, they were split on recommendations for director nominations.

South Korea’s National Pension Service, which owns about 8.7 percent of Hyundai Motor and 10 percent of Mobis, came out in support of the Korean auto conglomerate last week, saying Elliott’s proposal of $6 billion payouts were “excessive.”

--With assistance from Shinhye Kang.

To contact the reporters on this story: Sohee Kim in Seoul at skim847@bloomberg.net;Sam Kim in Seoul at skim609@bloomberg.net

To contact the editors responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net, Peter Pae

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