SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
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[ ] Soliciting Material Pursuant to Section 240.14a-12
THE R.O.C. TAIWAN FUND
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(Name of Registrant as Specified In its Charter)
LAXEY PARTNERS LIMITED
THE VALUE CATALYST FUND LIMITED
LP VALUE LIMITED
LAXEY UNIVERSAL VALUE L.P.
LAXEY INVESTORS, L.P.
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LAXEY PARTNERS LTD
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Stanley House o 7-9 Market Hill o Douglas o Isle of Man IM1 2BF
Tel. 01624 690900 Fax. 01624 690901
AN IMPORTANT MESSAGE TO THE R.O.C. TAIWAN FUND SHAREHOLDERS
MANAGEMENT HAS PASSED AN UNPRECEDENTED RESTRICTION ON SHAREHOLDER RIGHTS.
DON'T LET THEM GET AWAY WITH IT!
June 17, 2003
Dear Fellow Shareholders of The R.O.C. Taiwan Fund (the "Trust"):
We have previously advised you that, in December 2002, the Board of
Trustees (the "Board") amended the Bylaws of the Trust to force all shareholder
proposals that are not approved by the Board to be presented under the
restrictive procedures of Rule 14a-8 of the Securities and Exchange Act. In one
fell swoop, the Board cut off the rights of shareholders to present proposals,
and for you to consider such proposals, through all other procedures that are
allowed under state corporate laws and federal securities laws.
In an age of enormous corporate governance advances, this destruction
of shareholder rights is unprecedented. No similar sized closed-end fund has
such a restriction--a point that the Trust does not even attempt to refute in
its latest letter. What makes it worse is that the Board claims that this has
been the Trust's policy for years and, in our opinion, falsely claims that "as a
general rule" all investment companies retain the discretion "to determine
whether to present for a binding shareholder vote proposals that the board
considers not in the best interests of ALL shareholders."
THE BOARD HAS UNILATERALLY USURPED YOUR RIGHTS!
This Board actually believes that it has the right to determine whether
the shareholders should even be allowed to consider such proposals. This
misguided view is a slap in the face to shareholder rights. When the Board
sought to block us from presenting our proposal to terminate the Trust's
investment adviser (the "Adviser") it was only through the intervention of the
Securities and Exchange Commission that we gained the opportunity to do so.
The Board now attempts to justify its actions by stating in its latest
letter that every board has a unilateral right to reject shareholder proposals,
even if they have not formally approved amendments to their charter documents as
did the Trust. NO MATTER WHAT PATHETIC EXCUSES MANAGEMENT OFFERS FOR THIS
SERIOUS ENTRENCHMENT TACTIC, THE FACT IS YOU ARE NOW SADDLED WITH A SEVERE
ANTI-SHAREHOLDER BYLAW. THIS IS RESULT OF THE UNILATERAL ACTION OF THE
BOARD--SIX MEMBERS OF WHICH OWN NO STOCK IN THE TRUST AND THREE MEMBERS OF WHICH
ARE INTIMATELY TIED TO THE ADVISER.
You cannot afford to stand by idly while shareholder rights are being
taken away from you. Allowing the Board and the Adviser to get away with this
will set a dangerous precedent that could encourage management in the Trust and
in other closed-end funds to adopt additional restrictions to disregard
shareholder rights.
THE TRUST HAS UNDERPERFORMED
In its first letter to you, the Board admitted that for the period of
the last five calendar years the Trust "underperformed the TAIEX after
translation into U.S. Dollars." Believe it or not, the Board made that statement
about their underperformance in the section of their letter entitled "The
Trust's Adviser Should Be Retained."
Now the Board, with a crafty change of language in their latest letter,
is attempting to put a more positive spin on the Trust's performance without
retracting their previous admission of underperformance. You should ask the
Board how they can continue to pat themselves on the back in the face of the
Trust's underperformance, including the Trust's 6.7% underperformance of the
TAIEX so far in 2003 (through June 11), and the continued significant discount
from net asset value ("NAV").
OUR PRIMARY FOCUS IS TO NARROW THE SIGNIFICANT DISCOUNT FROM NAV AT
WHICH THE TRUST'S SHARES TRADE AND PROVIDE ALL SHAREHOLDERS WITH THE OPPORTUNITY
FROM TIME TO TIME TO SELL A PORTION OF THEIR SHARES FOR AT LEAST 98% OF NAV,
SUCH AS AN INTERVAL FUND PROGRAM. Unfortunately, the Board and the Adviser
appear completely uninterested in providing shareholders with any such
opportunity. They appear to be more concerned with maintaining the highest
possible amount of management fees for the Adviser than with providing you with
a real choice as to whether to stay in an underperforming fund or to choose a
different investment alternative. Voting to terminate the Adviser is one of the
few effective ways for you to express to the Board your displeasure with the
Trust's priorities.
We are not seeking at this time to elect nominees to the Board or to
control the Trust or the Adviser. We simply want you to have the opportunity to
vote for changes to the Trust which we believe will serve to benefit all
shareholders, rather than simply to maintain the status quo. Send a message to
the Board that changes are needed!
THE BOARD AND THE ADVISER SHOULD BE HELD ACCOUNTABLE FOR THE TRUST'S
POOR PERFORMANCE, THE SIGNIFICANT DISCOUNTS FROM NAV AND THE BOARD'S BLATANT
DISREGARD FOR SHAREHOLDER RIGHTS. Therefore, we urge you to vote on our GOLD
proxy card to WITHHOLD AUTHORITY on proposal #1, vote FOR conversion of the
Trust to an open-end investment company on proposal #2 and vote FOR termination
of the Adviser's contract on proposal #3. Send a message to the Board that their
actions will not be tolerated!
Thank you once again for your consideration. Since the June 24 Annual
Meeting is only days away, we urge you to take prompt action. YOUR VOTE COUNTS!
Sincerely yours,
LAXEY PARTNERS LIMITED
/s/ Andrew Pegge
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Name: Andrew Pegge
Title: Director
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TIME IS SHORT. THE ANNUAL MEETING IS JUNE 24. PLEASE SIGN, DATE AND
RETURN THE GOLD PROXY CARD TODAY. IF YOU HAVE ALREADY SENT A WHITE PROXY TO THE
TRUST YOU HAVE EVERY LEGAL RIGHT TO REVOKE YOUR VOTE BY SIGNING AND RETURNING A
LATER-DATED GOLD PROXY CARD. ONLY YOUR LATEST DATED PROXY COUNTS.
IF YOU HOLD YOUR SHARES IN STREET NAME, PLEASE RETURN YOUR GOLD PROXY
CARD IN THE ENVELOPE PROVIDED TO YOU BY YOUR BANK OR BROKERAGE FIRM. TO MAKE
CERTAIN YOUR SHARES ARE VOTED IN TIME, WE URGE YOU TO CONTACT THE PERSON
RESPONSIBLE FOR YOUR ACCOUNT AT YOUR BANK OR BROKERAGE FIRM, AND INSTRUCT THAT
PERSON TO EXECUTE A GOLD PROXY ON YOUR BEHALF. FOR ASSISTANCE IN VOTING YOUR
SHARES, PLEASE CONTACT OUR PROXY SOLICITOR, MORROW & CO., INC. AT (800)
607-0088; BANKS AND BROKERS CALL COLLECT AT (212) 754-8000.
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