Fund Proxy Dispute Remains Unresolved
January 10, 2000
Ron Olin, a shareholder activist, succeeded in having a meeting of the shareholders of the closed-end Global Small Cap Fund of New York adjourned before its business of holding a shareholder vote on opening the fund, was accomplished.
Olin, chairman and CEO of Deep Discount Advisors of Asheville, N.C., and a member of the fund's board, called for the adjournment of the fund's Dec. 30 special meeting because the fund's board of directors was refusing to recognize Deep Discount's opposing proxy, Olin said in an interview last week. That proxy would have shareholders vote on electing a new slate of directors to the fund, he said. The meeting will be reconvened on Jan. 14.
The adjournment marked the latest episode in a dispute between Deep Discount and the fund's board of directors. Deep Discount sent a protest letter to the SEC on Nov. 29 about the issue. (MFMN 12/13/99)
In a Dec. 29 letter to the fund's shareholders, also filed with the SEC, Brian M. Storms, director and senior vice president of the fund, urged shareholders to ignore Deep Discount's opposing proxy, and criticized the performance of Clemente Strategic Value Fund of New York, a fund whose board is controlled by directors from Deep Discount.
The letter said the Global Small Cap Fund's average annual return, based on market price, was 56.04 percent, compared to 36.88 percent for the Clemente Strategic Value Fund, from Sept. 30, 1998 through Nov. 30, 1999.
"In other words, the Fund's average annual return during this period was about 50 percent higher than Clemente's," the letter said. "This is so despite the Soliciting Stockholders' control of Clemente's management during this period."
According to Storms' letter, the only matter that could be voted on at the special meeting was a proposal for the Global Small Cap Fund to be reorganized into the open-end PaineWebber Global Equity Fund.