SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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The Swiss Helvetia Fund, Inc.
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(Name of Registrant as Specified In Its Charter)
Bankgesellschaft Berlin AG
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Bankgesellschaft Berlin AG
Alexanderplatz 2
D-10178 Berlin
Germany
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THERE SHOULD BE STOCKHOLDER REPRESENTATIVES ON THE BOARD
May 7, 2001
Dear Fellow Stockholder of The Swiss Helvetia Fund, Inc. (the "Fund"):
We, Bankgesellschaft Berlin AG, own over 572,000 Fund shares, or
approximately 2.38% of the shares outstanding. We are seeking your support in
electing our three nominees to the Board of the Fund at the May 15 Annual
Meeting. Currently there are no members of the Board of Directors who were
nominated by any stockholder of the fund in its capacity as a stockholder. We
are seeking to replace three Fund directors who collectively own fewer than
three thousand shares of the Fund.
Our objective is to increase the Fund's value by working to lessen or
eliminate the discount at which its shares trade from net asset value, and to
improve its corporate governance.
BOARD REACTION
If elected, our nominees would comprise only one third of the Fund's
Directors. In fact, based on what we consider to be restrictive and arbitrary
director qualification requirements adopted by the Fund Board, perhaps only one
of our nominees, Mr. Dirk Kipp, will be seated should our three nominees receive
a plurality of your votes.
You should know that these restrictive director qualifications were
apparently adopted in reaction to a narrowly defeated stockholder proposal at
last year's annual meeting to open-end the Fund and are the subject of costly
litigation that you and we, as the Fund's owners, are forced to bear.
In their most recent proxy materials, the Fund seeks to denigrate the
qualifications of our nominees with statements like "...Their primary
occupations appear to consist of equity trading for Bank Berlin." Here we have
to concede they have a point. We are independent investors with a proven track
record of investing in other closed-end country funds and working within these
funds to lessen or eliminate the discounts at which their shares trade from net
asset value. This is exactly the type of qualification needed.
Don't forget that these are the same entrenched incumbent directors who
approved a by-law increasing to a 75% supermajority the vote required for you
and us - the owners - to change the by-laws and then claimed that this was
"...to give a greater voice to the Fund's minority stockholders." In fact, this
makes it virtually impossible to approve changes.
WHO IS PAYING FOR ALL OF THESE ACTIONS BY THE FUND?
You and we are. Unlike the Fund, which is spending large sums of
stockholder money to defend their incumbent nominees, their current investment
adviser, and litigation that another outraged stockholder has instituted only
because the Board adopted the entrenchment by-laws, we are spending only our own
money to further our nominees' candidacy. The incumbent management and Board, on
the other hand, told you they anticipated spending approximately $80,000 on
their solicitation beyond the usual expenses for an annual meeting. Although the
Board says Hottinger Capital will bear a portion of the cost with respect to
Proposal Number 2 (continuation of Investment Advisor Agreement), is it really
conceivable that with the three mailings they have sent out so far (and how many
more will there be?), the cost of their proxy solicitor's telephone calls to
stockholders, and substantial attorneys' time and attention, the TOTAL cost will
be only $80,000?
WHAT DO INDEPENDENT ANALYSTS THINK ABOUT OUR NOMINEES?
BOTH LEADING INSTITUTIONAL PROXY ADVISORS RECOMMEND VOTES
FOR THE BANKGESELLSCHAFT NOMINEES
In making their voting recommendations to their institutional clients,
both Institutional Shareholder Services (ISS) and The Proxy Monitor recommended
votes FOR our nominees for Director. In all fairness, we must acknowledge that
they also recommended leaving the Hottinger Investment Advisory Agreement in
place. We disagree with them on that point, and feel more strongly than ever
that the only way to really get the attention of this Board, and to remind them
of who is working for whom, is to terminate the Hottinger agreement.
ISS, in making its recommendation to its institutional clients, said in
bold type on the first page of its report --"To follow ISS's vote
recommendations execute your votes on the dissident's BLUE proxy card and
discard management's WHITE proxy card."
In the "Background" section of its report, ISS said the following:
"Since 1997 Bank Berlin, through its representatives, has proven
itself to be both a prolific and successful mechanism for shareholder
action at closed-end mutual funds investing in European issuers."
In the "Analysis" section of its report, ISS began with the statement:
"This contest is not about the discount at which the fund's shares
trade, nor Hottinger's performance as an advisor. Rather it is about the
board's unilateral decision to disenfranchise the shareholder."
In this same section, commenting upon recent Board actions, ISS said:
"We nevertheless, are hard pressed to believe the veracity of the
fund's characterization of the recent bylaw amendments, as detailed here.
They are neither reasonable nor in the best interest of shareholders. They
cannot be defined as anything other than anti-takeover in nature. In fact,
they violate the fundamental intent of shareholder vote. We agree with
Bank Berlin that the supermajority vote requirement and director
qualifications effectively
disenfranchise the shareholder. Despite the fund's claims to the contrary,
the supermajority vote threshold suggests to us that the board has little
faith in or regard for the will of shareholders."
Later in this same section they say:
"With respect to the director qualifications in the fund's bylaws,
ISS considers the decision unprecedented, and further suggests that the
board had no motivation other than to entrench themselves.....We ...
contend that the fund's requirements are specious, and that Bank Berlin's
nominees are more than qualified to serve on the board. However, the
director qualifications, as currently construed, preclude even the most
qualified individuals; and on the surface appear to be requirements that
were crafted to support the profiles of the fund's current directors."
The Proxy Monitor, in its report to its clients, in addition to
recommending a vote in favor of our nominees, made this comment:
"Moreover, Bank Berlin claims that some decisions made by the
incumbent board have been detrimental to shareholders. These allegations
have not been refuted by the board."
WE NEED YOUR SUPPORT TO REMIND THE FUND'S BOARD OF
WHO IS SUPPOSED TO BE WORKING FOR WHOM
This letter may be our final communication to most of our fellow
stockholders prior to the May 15 annual meeting.
Accordingly, please sign, date and return today, in the envelope provided,
our BLUE proxy card. Do not return any white Fund card - even as protest against
the Fund's entrenchment efforts - since that might inadvertently have the effect
of canceling out your BLUE Bankgesellschaft proxy.
A vote FOR our nominees on the BLUE proxy card is a vote for independent
stockholder representation on the Board and a much-needed infusion of new blood,
energy and ideas. It also effectively is a vote AGAINST further entrenchment
devices and efforts to limit stockholder rights - yours and ours - and unchecked
waste of stockholder money in that effort!
Thank you for your support. If you have any questions or require
assistance in having your shares voted, please contact Mellon Investor Services,
who is assisting us with this solicitation, toll-free at 1-800-414-2879.
Sincerely yours,
BANKGESELLSCHAFT BERLIN AG