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SIGNATURE PETER CORNIOTES
TITLE ASSISTANT SECRETARY
The Board of Directors and Shareholders of
Lexington Emerging Markets Fund, Inc.:
In planning and performing our audit of the financial statements of
Lexington Emerging Markets Fund, Inc. (the "Fund") for the year
ended December 31, 1998, we considered its internal control,
including control activities for safeguarding securities, in order
to determine our auditing procedures for the purpose of expressing
our opinion on the financial statements and to comply with the
requirements of Form N-SAR, not to provide assurance on the internal
control.
The management of the Fund is responsible for establishing and
maintaining internal control. In fulfilling this responsibility,
estimates and judgments by management are required to assess the
expected benefits and related costs of controls. Generally,
controls that are relevant to an audit pertain to the entity's
objective of preparing financial statements for external purposes
that are fairly presented in conformity with generally accepted
accounting principles. Those controls include the safeguarding of
assets against unauthorized acquisition, use, or disposition.
Because of inherent limitations in internal control, error or fraud
may occur and not be detected. Also, projection of any evaluation
of internal control to future periods is subject to the risk that
it may become inadequate because of changes in conditions or that
the effectiveness of the design and operation may deteriorate.
Our consideration of internal control would not necessarily disclose
all matters in internal control that might be material weaknesses
under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the
design or operation of one or more of the internal control
components does not reduce to a relative low level the risk that
misstatements caused by error or fraud in amounts that would be
material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the
normal course of performing their assigned functions. However, we
noted no matters involving internal control and its operation,
including controls for safeguarding securities, that we consider to
be material weaknesses as defined above as of December 31, 1998.
This report is intended solely for the information and use of
management, the Board of Directors of Lexington Emerging Markets
Fund, Inc., and the Securities and Exchange Commission.
/s/ KPMG LLP
New York, New York
February 8, 1999
For period ending 12-31-98
File Number 811 - 8250
77(C) Matters submitted to a vote of security holders.
a. Special meeting of shareholders - August 12, 1998
Total Outstanding Shares as of June 15, 1998: 2,449,253
b. Matter voted on and number of affirmative/negative votes:
1. Directors Elected: S.M.S. Chadha, Robert M. DeMichele, Beverley C. Duer,
Barbara R. Evans, Richard M. Hisey, Lawrence Kantor, Jerard F. Maher, Andrew
M. McCosh, Donald B. Miller, John G. Preston and Allen H. Stowe.
For All Nominees: 2,199,440 Withheld Authority: 244,992
Votes Votes Votes
For Against Abstained
--------- -------- ---------
2. Approval of an investment sub-advisory
agreement between Lexington Management
Corporation and Stratos Advisors, Inc.
with respect to the Fund............. 2,156,456 208,118 79,857
3. Selection of KPMG LLP as Independent
Auditors ............................ 2,335,634 43,030 65,768
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
The Schedule contains summary financial information extracted from annual
audited financial statements dated December 31, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
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