SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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THE KOREA FUND, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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The following is the text of a letter sent to stockholders of The Korea Fund,
Inc. on September 28, 2004:
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THE KOREA FUND, INC.
345 Park Avenue
New York, NY 10154
September 28, 2004
PROTECT YOUR INVESTMENT IN THE FUND:
VOTE THE WHITE PROXY CARD TODAY
Dear Fellow Stockholder:
Korea Fund's annual meeting of stockholders is fast approaching... but
the City of London is still not telling you the whole truth about the proposals
they want you to support. Despite what City of London would have you believe,
its proposals involve grave risks to the Fund, and to your investment in it. We
urge you to vote FOR the board's nominees and AGAINST the stockholder proposal
to terminate the Fund's investment management agreement.
TERMINATING THE MANAGER IS RISKY
City of London supports a proposal by Harvard's investment managers to
terminate the Fund's investment advisory agreement - even though the Fund's
investment manager, Deutsche Investment Management Americas, Inc., has delivered
superior investment performance at a fee that has enabled the Fund to have a
remarkably low expense ratio.
Terminating the Fund's investment manager is inherently risky. It would
disrupt investments by the Fund. Your Board of Directors -- all but one of whom
are unaffiliated with DeIM -- believe there can be no assurance of finding a new
manager with comparable capabilities and proven performance.
City of London now asks you to believe that the Fund has received a
proposal from a qualified investment manager. Nothing could be further from the
truth. Instead, two representatives of an investment banker said they would like
to meet with the Fund's independent directors about a proposal - not described
other than as involving an (unnamed) investment manager - that they believed
would be of interest. Saying they wanted to act as a "matchmaker", they
disclaimed any authority to speak for the investment manager. One of the
representatives is a former City of London employee who had submitted a proposal
to at least one closed-end fund to terminate its investment adviser.
On September 23, Harvard's investment manager in a letter to the Fund's
directors said that it had met with two representatives of the same investment
bank who had identified an alternative manager - again, unnamed.
Not surprisingly, given the nature of this vague inquiry, the
independent directors declined to meet with these would-be "matchmakers" whose
approach bears no resemblance to a concrete proposal
from a reputable investment manager with demonstrated capabilities and a record
of Korean investment performance as impressive as those of the Fund's manager.
Selecting the Fund's investment manager is centrally important to the
Fund's performance, and to your investment. If and when a need arises to
consider alternative managers, your independent directors are well equipped to
identify potential candidates without a financial intermediary.
Your independent directors have unanimously recommended that you vote
against the proposal to terminate the Fund's investment adviser. They did so
after carefully considering all relevant factors, including DeIM's strong
research capabilities in Korea, its low management fee, and its excellent
performance record. The directors believe discussions regarding a change of
investment manager should not be undertaken lightly - and certainly not because
of an approach by an unauthorized financial intermediary referring to an unnamed
other party.
TAKE A CLOSE LOOK AT CITY OF LONDON'S CLAIMS
Look closely at City of London's claims. Look at the facts, and think
about the risks to your investment before you vote.
CLAIM: City of London would have you believe that a self-tender by the
Fund for up to 50% of its shares would not harm the Fund or its
stockholders.
FACT: Look what has happened at JF China Region Fund. One of
City of London's two director nominees, Julian Reid, has been
a director of that fund since 1997. The fund has shrunk
dramatically in size in a series of self tender offers and has
undergone a marked increase in its expense ratio, which was
2.54% -- more than twice that of the Korea Fund - for 2003.
FACT: Mr. Reid is Chairman and President of Saffron Fund
(formerly Jardine Fleming India Fund), which is being
liquidated, in part because of its high expense ratio - 3.48%
for the year ended November 2003. That fund's expense ratio
rose partly because of a self-tender when Mr. Reid was a
director.
CLAIM: "City of London has been a long-term investor in the Fund and
intends to remain a Stockholder."
FACT: City of London has engaged in hundreds of trades in
shares in your Fund - often within a short time of trades in
the other direction. If City of London really is a long-term
investor, why does it support a repurchase of up to 50% of the
Fund's shares?
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AN OBJECTIVE OPINION
You don't have to take our word for it. Institutional Shareholder
Services, the leading independent advisory firm, has recommended that its
subscribers vote FOR the Fund's director candidates and AGAINST termination of
the Fund's investment advisory contract.
Here's what ISS says:
o "DeIM has performed well as the investment advisor as performance has
been strong, leading to strong returns for shareholders
o "The board is also carefully monitoring any discount, but it will not
seek the discount's elimination at the expense of long-term
performance."
VOTE TODAY TO PROTECT YOUR INVESTMENT
The annual meeting is on October 6 - only days away. You can still
protect the Fund and your investment in it if you act today by sending and
sending back a WHITE proxy card voting FOR the Korea Fund candidates and AGAINST
Harvard's proposal. Discard any GOLD card you may receive from City of London.
Thank you for your support.
On behalf of the Board of Directors of The Korea Fund, Inc.
/s/Robert J. Callander
Robert J. Callander
Chairman of the Board
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Internet and Telephone Voting
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Because of the short time until the meeting, we encourage voting by
internet or by toll-free telephone, available to many whose shares are
held through banks or brokers. Instructions for internet and telephone
voting in most cases will be included on the enclosed WHITE voting form
provided by your broker or bank. Please follow those instructions.
If you need any assistance in proxy voting, please call 1-800-843-0369
to speak with one of the Fund's proxy specialists at Georgeson
Shareholder Communications.
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