SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |_|
Filed by a Party other than the Registrant |X|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
India Growth Fund Inc.
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
JOHN D. CHAPMAN
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No Fee Required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
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305 Madison Avenue, 46th Floor, New York, NY 10165
(212) 682-2300 // Fax (212) 682-6232
September 14, 2000
Dear Fellow India Growth Fund Shareholder:
At the next annual meeting of the India Growth Fund (the "Fund" or "IGF"),
to be held on September 29, 2000 at 3 p.m. at the offices of Clifford Chance
Rogers & Wells LLP, 200 Park Avenue, New York, NY 10166, I will make two
proposals in an attempt to permanently reduce our Fund's discount to net asset
value ("NAV"). First, I will nominate Howard I. Golden, Paul Douglas and myself
as Class II directors because, unlike the Board, we have clearly and
unambiguously committed ourselves to take concrete steps to enhance shareholder
value by reducing our Fund's discount to NAV - a step the Board has consistently
failed to take. This is clearly evidenced in the Fund's most recent earnings
report for the fiscal year ended June 30, 2000, which showed a 30.9% increase in
NAV but only a 19.3% increase in market price.
Second, I will present a shareholder's resolution recommending that the
Board take decisive steps to permanently reduce our Fund's discount to under
20%. According to statistics provided by the Closed-End Fund Center, for the
five-year period ending June 30, 2000, our Fund has been the worst performer
among the four India country funds trading on the New York Stock Exchange. This
abysmal performance has taken place on both an NAV and market value basis. In
addition, for over two years, the Fund has traded at a discount to NAV that has
even exceeded 40%. These large discounts diminish shareholder returns and
exacerbate IGF's underperformance.
Before making this proposal, Howard I. Golden and I approached IGF and
asked the Board to take concrete steps to reduce the Fund's persistently wide
discount to below 20%. The Fund's August 21 and September 7 press releases set
forth its response. The Fund indicated that it would repurchase up to 20% of the
Fund's outstanding shares in open market purchases commencing during the fourth
quarter of 2000. IGF additionally represented that if in the third quarter of
2001 the Fund continued to trade at a discount of 20% or more, the Fund would
commence a tender for 20% of the Fund's common stock in the fourth quarter of
2001. The Fund stated that it anticipated that the tender offer would be
conducted at a price equal to 90-95% of the Fund's NAV less an unspecified fee
to defray the costs of the tender.
These responses are deficient because:
o There is no concrete plan to reduce the Fund's discount in the
near future. The board has not shown why its share repurchase
program commencing in the fourth quarter of 2000 to buy up to
20% of IGF's shares will significantly reduce its discount;
o If the Board subsequently approved a tender, it would not
commence until the later half of 2001 and then at an uncertain
discount to NAV with some undisclosed fee attached.
In contrast, to the Board's delaying tactics, we will take immediate and
substantial steps to reduce the discount.
As a Fund shareholder and Managing Director at The Brookdale Group, Ltd,
which manages funds owning 435,100 shares, I believe that it is time to elect
directors who are committed to taking the necessary steps to improve the Fund's
performance by reducing its discount. Such steps might include converting the
Fund to open-end status, or making it an interval fund (where redemptions can be
made only weekly or monthly) or by distributing cash to shareholders through a
tender offer at or near NAV, or otherwise. In my view, the Board's plan is not a
good-faith promise to eliminate the discount but an exercise in obfuscation and
delay. I consequently urge you to vote for Messrs. Golden, Douglas and me and to
support our proposal attacking the discount head on.
If you have already returned the WHITE proxy card sent to you by the Board
and you want to elect directors who are committed to taking action designed to
eliminate our fund's discount, you must return a GREEN proxy card. Remember,
only the last valid proxy card you submit is counted and it supersedes any
previous ones. Therefore, once you submit a GREEN proxy card, please do not sign
and submit a later dated WHITE proxy card, as that will invalidate your vote. If
you have any questions, please call Howard I. Golden or me at (212) 682-2300 or
e-mail either of us at [email protected].
Yours truly,
John D. Chapman
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PROXY STATEMENT IN OPPOSITION TO THE SOLICITATION BY THE BOARD OF DIRECTORS OF
THE INDIA GROWTH FUND INC.
ANNUAL MEETING OF SHAREHOLDERS (To be held on September 29, 2000)
My name is John D. Chapman and I am a Managing Director at The Brookdale
Group, Ltd, a New York based fund management company specializing in investing
in closed-end funds. I personally own 200 shares of the Fund and The Brookdale
Group, Ltd, through various managed funds and a managed account, beneficially
owns 435,100 shares of the Fund. I am sending this proxy statement and the
enclosed GREEN proxy card to shareholders of record on August 4, 2000 (the
"Record Date") of the Fund. I am soliciting a proxy to vote your shares at the
2000 Annual Meeting of Shareholders of the Fund (the "Meeting") and at any and
all adjournments or postponements of the Meeting. Please refer to the Fund's
proxy soliciting material for additional information concerning the Meeting and
the matters to be considered by the shareholders.
This proxy statement and the enclosed GREEN proxy card are first being
sent to shareholders of the Fund on or about September 14, 2000.
INTRODUCTION
There are two matters (or proposals) that the Fund has scheduled to be
voted upon at the Meeting:
1. The election of two persons to fill two of the three Class II director's
slots of the Fund until 2003;
2. The ratification of the selection of PricewaterhouseCoopers LLP as the
independent accountants of the Fund for the fiscal year ending June
30,2001;
In addition, I will present the following proposal at the Meeting:
3. Resolved, the shareholders recommend that the Board take appropriate steps
to narrow the fund's discount to net asset value. These measures might
include, but would not necessarily be limited to, converting the fund to
open-end status or an interval fund, or distributing cash to shareholders
if the Fund trades at an average discount of 20% or more of net asset
value for any twelve-week period starting on or after October 15, 2000.
With respect to these matters, I am soliciting a proxy to vote your
shares:
FOR the election of Howard I. Golden, Paul Douglas and me
as directors of the Fund; and
FOR the proposal to reduce the discount.
I am making no recommendation as to how your shares should be voted on the
ratification of the selection of the Fund's independent accountants.
How Proxies Will Be Voted
All of the proposals scheduled by the Fund to be voted on at the Meeting
are included on the enclosed GREEN proxy card. If you wish to vote FOR the
election of my nominees to the Board, you may do so by completing and returning
a GREEN proxy card.
If you return a GREEN proxy card to me or to my agent, your shares will be
voted on each matter as you indicate. If you do not indicate how your shares are
to be voted on a matter, they will be voted FOR the election to the Board of
Howard I. Golden, Paul Douglas and me and FOR the proposal to reduce the
discount and will ABSTAIN from voting on the ratification of the selection of
the Fund's independent auditor.
If you return a GREEN proxy card, you will be granting the persons
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named as proxies discretionary authority to vote on any other matters of which
they are not now aware that may come before the Meeting. These may include,
among other things, matters relating to the conduct of the Meeting.
Voting Requirements
If a quorum is not present at the Meeting, or if a quorum is present but
sufficient votes to approve any of the proposals are not received, the persons
named as proxies may propose one or more adjournments of the Meeting to permit
further solicitation of proxies, consideration of matters of which I am not
aware at this time, or negotiations with the incumbent directors. The proxies
may also propose one or more adjournments for other legal reasons not currently
foreseen. If an adjournment of the Meeting is proposed, the persons named as
proxies on the GREEN proxy card will vote for or against such adjournment at
their discretion. The proxies may also temporarily decline to attend the
Meeting, thereby preventing a quorum to solicit additional proxies or for other
legal reasons not currently foreseen. Please refer to the Fund's proxy statement
for the voting requirements for each proposal.
Revocation of Proxies
You may revoke any proxy you give to management or to me at any time prior
to its exercise by (i) delivering a written revocation of your proxy to the
Fund; (ii) executing and delivering a later dated proxy to me or to the Fund or
to our respective agents; or (iii) voting in person at the Meeting. (Attendance
at the Meeting will not in and of itself revoke a proxy.) There is no limit on
the number of times you may revoke your proxy prior to the Meeting. Only the
latest dated, properly signed proxy card will be counted.
Information Concerning the Soliciting Shareholder
The shareholder making this solicitation is John D. Chapman. I am an
attorney, Chartered Financial Analyst and Managing Director at The Brookdale
Group, Ltd, an investment manager that manages investment portfolios having
assets in excess of $155 million. Brookdale, with a business address at 305
Madison Avenue, 46th Floor, New York, New York 10165, specializes in investing
in locally listed and over the counter traded closed-end funds. Although
Brookdale's investment strategy generally is passive, from time to time
Brookdale has taken a controlling interest in closed-end funds when they have
underperformed or been poorly managed to the detriment of their shareholders.
As of the record date, I owned 200 shares of common stock of the Fund.
Brookdale, of which I am a Managing Director, through various investment funds
and a managed account, may be deemed the beneficial owner of 435,100 shares of
Common Stock. Combined, these positions total 435,300 shares and represent
approximately 4.42% of the Fund's outstanding Common Stock. Exhibit 1 to this
proxy statement contains a schedule showing these purchases and sales of Common
Stock within the past two years.
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Proposal 1: ELECTION OF DIRECTORS
At the Meeting, I will nominate the following persons for election as
directors for a term expiring in 2003. Each nominee has consented to serve if
elected and to being named in the proxy statement.
Name, Age
And Address Principal Business
----------------- ------------------
Howard I. Golden Mr. Golden is an attorney and the
Age: 54 President of The Brookdale Group, Ltd,
Address: 305 Madison Avenue the General Partner of Brookdale
46th Floor International Partners, L.P. ("BIP") and
New York, New York 10165 Central European Privatization Fund, L.P.
("CEPF"), private investment
partnerships. For more than five years he
has served as the President of
predecessor and affiliated investment
partnerships to The Brookdale Group, Ltd.
He also serves on the supervisory boards
of the largest closed-end funds in the
Czech Republic and in Slovakia (the Czech
Restitution Investment Fund and the
Slovak Restitution Investment Fund), and
is on the Board of Directors of Kotva,
a.s., the largest department store in the
Czech Republic, the Romanian Investment
Fund, the Romanian Growth Fund, and the
Kazakhstan Investment Fund.
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John D. Chapman Mr. Chapman is an attorney, Chartered
Age: 44 Financial Analyst and, since April, 2000,
Address: 305 Madison Avenue a Managing Director of The Brookdale
46th Floor Group, Ltd. During the last five years he
New York, New York 10165 has worked in the following positions:
between 1998 and 2000, he served as a
Senior Enforcement Advisor to the United
States Department of the Treasury and
between 1994 and 2000 as a consultant to
a number of foreign governments on the
development of emerging capital markets,
private pension funds and privatization.
Previously he also served as a federal
prosecutor with the United States
Department of Justice. He is a director
of the Kazakhstan Investment Fund.
Paul Douglas Mr. Douglas has been a private investor
Age: 74 for more than the last five years. He
Address: 305 Madison Avenue previously was the Chairman and Chief
46th Floor Executive Officer of the Pittston
New York, New York 10165 Company; and the Chairman, Chief
Executive Officer, and Chairman of the
Executive Committee of, Freeport Minerals
Company and Freeport-McMoRan Inc. He has
served as a director of the Japan Fund,
Phillip Morris, Phelps Dodge, New York
Life, U.S. Trust, MacMillan Bloedel Ltd.,
Societe Nationale Elf Aquitaine, Polysar
of Canada, and South American Gold &
Copper Co., Ltd.
As of August 20, 2000, Messrs. Chapman, Golden and Douglas beneficially owned
200 shares, 435,100 shares and 0 shares of the Fund, respectively. Mr. Golden,
by virtue of his position at The Brookdale Group, LLC, may be deemed to be the
beneficial owner of the shares of common stock of the Fund owned by The
Brookdale Group, LLC.
Other than fees that may be payable by the Fund to its directors, neither
any nominee, nor The Brookdale Group, LLC, nor any of their or its associates
has any arrangement or understanding with any person with respect to any future
employment by the Fund or by any affiliate of the Fund or with respect to any
future transactions to which the Fund or any affiliate of the Fund will or may
be a party.
The persons named as proxies on the enclosed GREEN proxy card intend, in
the absence of contrary instructions, to vote all proxies they are entitled to
vote FOR the election of the above persons, each of whom have consented to stand
for election and to serve if elected. If any nominee is unable to serve, an
event not now anticipated, the proxies will be voted for such other person (who
shall be disinterested), if any, as is designated by the persons named as
proxies.
Proposal 2: RATIFICATION OF THE INDEPENDENT AUDITOR
The incumbent board of directors has selected PricewaterhouseCoopers LLP as the
independent accountants of the Fund for the fiscal year ending June 30, 2001.
Without further information, I cannot make any recommendation. Therefore, in the
absence of contrary instructions, the persons named as proxies on the GREEN
proxy card intend to ABSTAIN from voting on this matter.
Proposal 3: Recommendation to Narrow the Discount
IGF has consistently traded at a substantial discount to net asset value
over the past two years and, in my view, has generated an uncompetitive return
for shareholders over the last five years, even in comparison to its peers. I
believe that my shareholder's recommendation will send a clear message to the
Board that the shareholders are dissatisfied with the Fund's performance and
want the Board to take unambiguous actions to eliminate its persistent discount.
I further believe that electing directors whose interests are the same as the
other shareholders, and who are committed to reducing the discount, will improve
returns for all shareholders.
Because the Fund has been trading at a large discount to net asset value
for a substantial period of time, measures such as converting the fund to
open-end status or an interval fund, or distributing cash to shareholders
through a tender at or near NAV, would offer the best opportunities for
increasing the Fund's share prices. My proposal thus recommends a 20% trigger
whereby the Board will take specific disclosed steps in the event that the
discount exceeds 20% over a twelve-week period. The existence of a trigger may
lower the discount below the trigger amount because it encourages arbitrageurs
or specialists to purchase the Fund's shares, thus bidding up the price and
lowering the discount. In addition, by instituting a trigger discount above
which the Fund will open end, the risk of the discount widening should be
eliminated. Converting the Fund to open-end status would also improve the
governance of the Fund. Markets work well because they provide the right
incentives to managers. The managers of a closed-end fund, such as the India
Growth Fund, have very little incentive to improve the performance of the
individual securities the Fund owns since any increase in the value of the
portfolio has only a trivial effect on the manager's compensation. If the Fund
were converted to open-end status, the manager would have greater incentive to
perform, since poor performance would lead to redemptions, while good
performance would lead to an increase in assets under management and thus an
appreciable increase in the manager's compensation.
CERTAIN CONSIDERATIONS
In deciding whether to give me your proxy, you should consider the
following:
Implementation of certain Board actions such as converting to an open end
or interval fund may require shareholder approval, and no assurance can be given
that such approval will be obtained. In addition, various costs, which would be
borne indirectly by shareholders, may be associated with these actions,
including but not limited to those associated with holding a special meeting of
shareholders. I believe that such costs are far outweighed by the benefits of
these actions to most shareholders. Such benefits would include the narrowing of
the discount.
I believe that all shareholders of the Fund will benefit if any actions
taken to reduce or eliminate the discount from NAV are successful. The Brookdale
Group, LLC, the company for which I work, charges its investors a fee that is in
part based upon a share of the profits the client earns and therefore its fee
income will be greater if the value of the Fund's shares increases. In this
respect, I believe the interests of the shareholders and that of The Brookdale
Group, Ltd, are closely aligned.
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THE SOLICITATION
I am making this solicitation personally and in my capacity as a Managing
Director of The Brookdale Group, LLC. Persons affiliated with or employed by The
Brookdale Group, Ltd, will assist me in the solicitation of proxies. They will
not receive any special compensation for their services. Banks, brokerage houses
and other custodians, nominees and fiduciaries will be requested to forward this
proxy statement and the enclosed GREEN proxy card to the beneficial owners of
shares of Common Stock for whom they hold shares of record. The Brookdale Group,
LLC will reimburse these organizations for their reasonable out-of-pocket
expenses.
Initially, The Brookdale Group, Ltd, will bear all of the expenses related
to this proxy solicitation. Because I believe that the shareholders will benefit
from this solicitation, I intend to seek reimbursement of these expenses from
the Fund. Shareholders will not be asked by me to vote on the reimbursement of
solicitation expenses incurred by either the incumbent directors or me. I have
no knowledge about the expenses of the incumbents, but estimate that my expenses
will be about $30,000, or about 0.025 of one percent of the Fund's assets. As of
September 1, 2000, my expenses have been approximately $13,000.
Neither Howard I. Golden, Paul Douglas, The Brookdale Group, Ltd, nor I is
now a party to any contract, arrangement or understanding with any person with
respect to any securities of the Fund; and none of the aforementioned has been a
party to any contract, arrangement or understanding with any person with respect
to any securities of the Fund during the past year. Furthermore, there is no
arrangement or understanding involving Howard I. Golden, Paul Douglas, The
Brookdale Group, LLC, me, or any affiliate thereof that relates to future
employment by the Fund or any future transaction with the Fund.
ADDITIONAL PROPOSALS
I know of no business that will be presented for consideration at the
Meeting other than that set forth in this proxy statement and in the Fund's
proxy statement. If any other matters are properly presented for consideration
at the Meeting, it is the intention of the persons named as proxies in the
enclosed GREEN proxy card to vote in accordance with their own best judgment on
such matters.
DATED: September 14, 2000
EXHIBIT 1: SECURITIES OF THE FUND PURCHASED OR SOLD
WITHIN THE PAST TWO YEARS BY THE SOLICITING SHAREHOLDER
Except as disclosed in this proxy statement, I have not had any interest,
direct or indirect in the Fund. The following table sets forth certain
information with respect to purchases and sales of shares of Common Stock of the
Fund within the past two years by me and by the funds or account managed by The
Brookdale Group, LLC. A portion of the purchase price and market value of the
shares may from time to time be represented by margin borrowings, depending upon
the net debit balances, if any, of the margin accounts, which fluctuate daily.
Date Shares Purchased Date Shares Purchased
7/17/00 265,200(1) 7/21/00 10,000
7/28/00 30,000 8/1/00 86,000
8/2/00 1,200 8/7/00 25,000
8/8/00 10,000 8/9/00 7,900
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(1) Includes 200 shares purchased by John D. Chapman and 265,000 shares
purchased by The Brookdale Group, Ltd funds or a managed account under its
control.
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PROXY CARD
PROXY SOLICITED IN OPPOSITION TO THE BOARD OF DIRECTORS OF
THE INDIA GROWTH FUND INC.
BY JOHN D. CHAPMAN, A SHAREHOLDER
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON September 29, 2000
The undersigned hereby appoints John D. Chapman and Howard I. Golden, and each
of them, as the undersigned's proxies, with full power of substitution, to
attend the Annual Meeting of Shareholders of The India Growth Fund Inc. (the
"Fund") to be held at 3 p.m. on September 29, 2000, at Clifford Chance Rogers &
Wells LLP. 200 Park Avenue, New York, NY 10166, and any adjournment or
postponement thereof, and to vote on all matters that may come before the
Meeting and any such adjournment or postponement the number of shares that the
undersigned would be entitled to vote, with all the power the undersigned would
possess if present in person, as specified below. The proxies may vote in their
discretion with respect to such other matter or matters as may come before the
Meeting and with respect to all matters incident to the conduct of the Meeting.
The proxies may also temporarily decline to attend the Meeting, thereby
preventing a quorum in order to solicit additional proxies or for any other
legal reason.
(INSTRUCTIONS: Mark votes by placing an "x" in the appropriate [ ].)
1. ELECTION OF THREE CLASS II DIRECTORS.
FOR all of the nominees listed below |_| WITHHOLD AUTHORITY |_|
(except as indicated to the contrary below) to vote for all of the
nominees listed below
JOHN D. CHAPMAN, HOWARD I. GOLDEN, PAUL DOUGLAS
To withhold authority to vote for one or more nominees, enter the
name(s) of the nominee(s) below.
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2. To ratify the selection by the Board of Directors of ****** as the Fund's
independent accountants for the fiscal year ending *******:
FOR |_| AGAINST |_| ABSTAIN |_|
3. To approve or disapprove a shareholder proposal to urge the Board of
Directors to take the steps necessary to reduce the Fund's discount.
FOR |_| AGAINST |_| ABSTAIN |_|
Important - - Please sign and date below. Your shares will be voted
as directed. If no direction is made, this proxy will be voted for the election
of the nominees named above in Proposal 1 and for Proposal 3 and will abstain
from voting on Proposal 2. The undersigned hereby acknowledges receipt of the
proxy statement dated September 14, 2000 of John D. Chapman and revokes any
proxy previously executed. (Important - Please be sure to enter date.)
Please sign exactly as your name appears hereon. When shares are held by joint
tenants, both should sign. When signing as an attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by the President or other duly authorized officer.
If a partnership, please sign in partnership name by authorized person. Please
return promptly in the enclosed envelope.
SIGNATURE(S)______________________________________ Dated: ___________________
