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US hedge fund challenges LG corporate overhaul

Whitebox says planned spinoff harms minority investors of South Korean group

LG said in November it would spin off five affiliates into a new holding company next year.   © Reuters

SEOUL -- A U.S. hedge fund is challenging a plan by South Korea's LG to spin off four affiliates through a new holding company for a relative of the Koo family, arguing that it will fail to create value for long-suffering minority shareholders.

Whitebox Advisors, an LG minority shareholder, sent a letter to LG's board on Tuesday asking South Korea's fourth-largest conglomerate to scrap its plan to spin off LG Hausys, LG MMA, Silicon Works and LG International & Pantos.

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