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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 / /
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 Section 240.14a-11(c) or Section
240.14a-12
ROC TAIWAN FUND
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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)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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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 paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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T H E
R.O.C. [LOGO]
TAIWAN FUND
850 Third Avenue
New York, NY 10022
800-343-9567
May 15, 1997
Dear Shareholder:
I am writing to inform you of two recent decisions made by the Board of
Trustees and to discuss a very important upcoming proxy proposal. At the
Fund's June 3, 1997 annual meeting, shareholders will be asked to vote on a
proposal to convert the Fund to an open-end investment company. The Board of
Trustees strongly recommends that you vote against this proposal.
For the first quarter of this year, as well as for the one-month and
twelve-month periods ended April 30, 1997, the Fund has outperformed the
Taiwan Stock Exchange Weighted Index (TAIEX). The Fund's returns, on a net
assets value basis and in local currency (NTS), are illustrated in the chart
below:
12 months ended
April 1997 1st Quarter 1997 April 30, 1997
R.O.C. Taiwan Fund 7.44% 24.16% 53.50%
TAIEX 6.02% 15.44% 38.33%
Although there can be no assurance that the Fund will continue to
outperform the TAIEX in 1997 or during subsequent periods, I believe that the
Fund's recent performance can be attributed to several ongoing factors. These
include our management team and investment strategy, as well as the Fund's
ability to invest in Taiwan's fast-growing over-the-counter (OTC) market,
which has significantly outperformed the rest of Taiwan market during the
last year. The Fund currently is the only NYSE-listed fund that can invest in
Taiwan's OTC market.
The proposal to "open-end" the Fund is being presented to shareholders,
as required by the Fund's Declaration of Trust, because the Fund's average
discount to its net asset value exceeded 10% for one or more periods of 12
consecutive weeks. This requirement was included in the Fund's charter
documents at the insistence of certain holders of the Fund's shares in 1989
as a condition to their approval of the reorganization of the Fund (which was
then an open-end fund listed in London) into a U.S. closed-end fund.
In response to the triggering of the open-ending vote provision, the
Fund's Board of Trustees considered carefully whether it should support
reopening. As is discussed in more detail in proxy materials for the upcoming
annual meeting that were mailed to all shareholders of the Fund in April, the
Board concluded that the Fund should remain a closed-end investment vehicle.
I fully concur with the Board's decision and believe that maintaining the
Fund as a closed-end fund will better enable management to take advantage of
investment opportunities in the Taiwan market and allow the Fund to function
more efficiently.
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After the proxy materials were mailed, the Board considered the matter
further and concluded that additional action would be appropriate. In order
to permit investors to participate on the Fund's recent gains, and in light
of the discount to net asset value at which the Fund's shares have traded
during recent months on the NYSE, the Board of Trustees has declared a cash
dividend in the amount of US$1.20 per share, payable on June 20, 1997 to all
shareholders of record on June 2, 1997.
Further, the Board of Trustees has authorized the Fund to expend up to
US$15,000,000 to buy its own shares in a repurchase program conducted in
accordance with the provisions of Rule 10b-18 under the U.S. Securities
Exchange Act. Purchases pursuant to this repurchase program, which will
commence shortly, will be made only at prices below the net asset value of
the Fund's shares at the time of purchase.
The Board of Trustees and management do not expect that the foregoing
measures will eliminate entirely the discount to net asset value at which the
Fund's shares are currently trading. We hope, however, that they will reduce
the discount (although no assurance can be given that they will do so) and
that, in any case, the Fund's shareholders will find them responsive to
concerns that some have expressed regarding the Fund.
I continue to welcome any comments or suggestions that you may have
concerning the Fund. I also urge you to read the discussion concerning the
open-ending proposal contained in the Fund's proxy materials and to vote, as
recommended by the Board of Trustees, AGAINST this proposal. Thank you for
your support!
Sincerely,
/s/ DANIEL CHIANG
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Daniel Chiang
President
