SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
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[ ] Soliciting Material Pursuant to Section 240.14a-12
THE MEXICO FUND, INC.
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(Name of Registrant as Specified In its Charter)
LAXEY PARTNERS LIMITED
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The following letter is being mailed to stockholders of The Mexico Fund, Inc.
by representatives of Laxey Partners Limited (and the text of the letter is
being disseminated as a press release), commencing on February 26, 2002:
LAXEY PARTNERS LIMITED
STANLEY HOUSE, 7-9 MARKET HILL
DOUGLAS, ISLE OF MAN, IM1 2BF
TEL: 01624 690900 FAX: 01624 623819
AN IMPORTANT MESSAGE TO THE MEXICO FUND STOCKHOLDERS:
February 26, 2002
Dear Fellow Stockholders:
This morning, The Mexico Fund, Inc. (the "Fund") announced that its Board of
Directors has approved a limited repurchase program, in a last minute attempt
to respond to complaints that we and other stockholders of the Fund have made
concerning the Fund's original proposal. The Board's current repurchase
proposal merely reinforces our belief that the Directors are not serious about
addressing the legitimate wishes of a majority of the Fund's stockholders. The
Board's actions demonstrate just how critical it is to elect Directors
dedicated to serving the stockholders' interests. PLEASE SIGN, DATE AND RETURN
THE ENCLOSED GOLD PROXY CARD IN THE POSTAGE PAID ENVELOPE TODAY!
CLARIFICATION AT LAST - BUT TOO LITTLE, TOO LATE
The Fund's original repurchase plan provided that not less than 5% and not
more than 25% of the Fund's shares would be repurchased in any 12 month period
at not less than 98% of net asset value ("NAV"). The amount and timing of the
repurchases were in the sole discretion of the Board.
On February 19, 2002, we confirmed in writing that we sought 25% repurchases
in each of the next two quarters, with 10% repurchases in each successive
quarter unless the Fund's NAV discount falls below 8%. All repurchases would
be at not less than 98% of NAV.
Finally, after intense pressure from us and other stockholders, the Fund's
response today was to disregard the desire of a majority of the Fund's
stockholders for immediate liquidity and merely to clarify that in the first
year of its repurchase plan it only will make 10% repurchases in two tranches,
the first after shareholder and SEC approval of the repurchase plan and then
again in 6 months. In this morning's press release, the Fund provided no
information as to when, or if, the repurchase plan will be declared effective
by the SEC.
GIVEN THE BOARD'S TEPID RESPONSE, STOCKHOLDER REPRESENTATION ON THE BOARD IS
MORE CRITICAL THAN EVER!
This last minute clarification is too little, too late. It demonstrates how
little the Board is willing to offer the stockholders of the Fund. The Board
is telling you that, even under intense pressure by the stockholders, it will
not even provide you with the maximum liquidity possible under the Fund's own
repurchase plan.
Moreover, the Fund has not committed to provide liquidity for stockholders -
through a cash tender or otherwise - at not less than 98% of NAV if the Fund's
revised repurchase plan is not implemented within a reasonable timetable.
OUR NOMINEES ARE COMMITTED TO DELIVERING
THE FUND'S TRUE VALUE TO ALL STOCKHOLDERS
We have nominated for election as Directors Javier Lozano Alarcon and Xavier
Cervantes y Omana. Our nominees have extensive business experience in Mexico.
They will provide stockholders with a strong, new voice in the boardroom, and
are committed to delivering the Fund's true value to stockholders while
maintaining its status as a closed-end fund. Our nominees are committed to a
plan that would provide larger and more frequent repurchase opportunities for
all stockholders at a minimum of 98% of NAV.
WE SEEK ACCOUNTABILITY, NOT CONTROL
We are seeking the election of two members to the Fund's seven-member Board.
Our goal is to ensure good corporate governance and accountability from
management and the advisors, not to gain control over the Fund. Our nominees
will not be beholden to management and the advisors. They will be able to
focus on the stockholders' best interests and to ensure that the Board
understands its fiduciary duties to the stockholders.
WE WOULD LIKE TO REMIND STOCKHOLDERS THAT, ACCORDING TO THE FUND'S PROXY
STATEMENT, ROBERT KNAUSS WAS A DIRECTOR OF ENRON (ENERGY) AND JUAN GALLARDO T.
WAS CHAIRMAN OF GRUPO AZUCARERO MEXICO.(1) JAIME SERRA PUCHE WAS THE
NEWLY-APPOINTED SECRETARY OF FINANCE OF MEXICO IN DECEMBER 1994 WHEN MEXICO'S
PESO CRISIS OCCURRED. (2)
We are especially concerned that, if our directors are elected and if our
proposal to terminate the Fund's current investment advisory agreement is
approved by the stockholders, the Board will immediately seek to reappoint the
losing directors and the terminated investment advisor without stockholder
approval. Our nominees will take seriously these and other potential corporate
governance issues.
IF YOU BELIEVE THAT THE FUND SHOULD PURSUE A COURSE DESIGNED TO RESTORE YOUR
ABILITY TO RECEIVE THE TRUE VALUE FOR YOUR SHARES, PLEASE SIGN DATE AND RETURN
THE ENCLOSED GOLD PROXY TODAY IN THE POSTAGE PAID ENVELOPE PROVIDED WITH A
VOTE:
FOR our nominees (Proposals 1 & 2)
FOR the proposal to terminate the Advisory Agreement (Proposal 3)
AGAINST the proposal to amend the Advisory Agreement (Proposal 4) FOR
the proposal to adopt a share repurchase policy (Proposal 5) FOR the
stockholder proposal to open end the Fund (Proposal 6)
On behalf of Laxey Partners,
/s/ Andrew Pegge
Andrew Pegge
Director
(1) Grupo Azucarero Mexico was Mexico's second largest sugar group, and Mr.
Gallardo was reportedly its controlling stockholder. The company defaulted on
its debts in 2000 and had significant assets expropriated by the Mexican
government in 2001. The Sugar Worker May 2000 & September 2001.
(2) As a result of the crisis, which was attributed to the Secretary having
"badly botched what should have been a routine currency adjustment", a huge
amount of Mexico's foreign investment left Mexico. The News (Mexico City) May
4, 2000; see also Time (Domestic) January 9, 1995.
IMPORTANT
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Please sign, date and return the enclosed GOLD proxy card today in the
postage-paid envelope provided. Do not sign any white proxy card that you may
receive from the Fund, even as a protest vote against the Fund's Board and
Advisor -- it might cancel your GOLD proxy. If your shares are held on your
behalf by a broker or bank, please sign, date and return the GOLD proxy in the
envelope provided and contact the person responsible for your account and ask
them to ensure that your shares are voted on the GOLD card.
IF YOU HAVE ANY QUESTIONS, OR NEED ASSISTANCE IN VOTING YOUR SHARES, PLEASE
CONTACT THE FIRM ASSISTING US IN THE SOLICITATION OF PROXIES:
INNISFREE M&A INCORPORATED
501 Madison Avenue
New York, NY 10022
CALL TOLL-FREE: (888) 750-5834
Banks and Brokers call collect: (212) 750-5833