Counsel Independence
Why current Fund and trustee counsel cannot be treated as neutral safeguards
Independent counsel matters because counsel helps shape the process by which a fund board evaluates conflicts, disclosures, shareholder rights, and advisory contract renewals. When counsel has represented or worked with the parties driving the contested process, counsel’s role deserves scrutiny.
Current Fund Counsel
Fund counsel is expected to advise the Fund and support the Board in acting in the interests of the Fund and its shareholders.
Current Fund counsel previously served as trustee counsel to Paul Kazarian and Ketu Desai during the contentious period in which they opposed former directors’ efforts to give shareholders a vote on the Fund’s direction when that vote still mattered. That was their role: to advise Paul Kazarian and Ketu Desai. Current Fund counsel was involved in several of the actions described in the Saba’s Conduct section of this site.
In my assessment, the fact that the same counsel now serves as Fund counsel raises serious questions about whether the Fund is receiving independent advice in a process shaped by the same parties and objectives.
Current Trustee Counsel
Trustee counsel is expected to advise independent directors. That role is important where the interests of the Fund, its directors, its adviser, and shareholders may diverge.
Current trustee counsel has worked with Saba-backed directors in other funds on special projects, including related to the takeover of another closed-end fund. Trustee counsel then took the lead on ASA’s advisory contract review process. As discussed separately, that process raises serious questions because of both who was guiding it and how the review was conducted, including the substance and tone of follow-up questions directed to Merk.
This is not a technical concern. Counsel helped shape the very processes that shareholders are being asked to trust. Given the prior roles, relationships, and stakes involved, the role of current Fund and trustee counsel merits close scrutiny.
Saba is proposing to the Board that it hand-picked to repurpose ASA into a Saba-managed BDC-style investment vehicle with management fees and profit-sharing arrangements. File a complaint with the SEC to help protect ASA shareholders. As of this writing, ASA’s Board has not announced how it will proceed. The advisory agreement expires June 30. Shareholders need to act now.
Axel Merk owns over 300,000 shares of ASA Gold and Precious Metals Limited. He also serves as President and Chief Investment Officer of Merk Investments LLC, the Fund's investment adviser. He recently resigned as Chief Operating Officer of ASA.
The information presented on this website reflects the views and opinions of Axel Merk and is provided solely for educational and informational purposes. It does not constitute investment, legal, financial, or tax advice. You should consult your own advisors for guidance specific to your circumstances.
The plans of Saba and the Board are based on publicly disclosed information only and are therefore accordingly qualified in their entirety and subject to change.
This site and its content have not been approved by ASA Gold & Precious Metals Ltd. (the “Company”). The Company concentrates its investments in the gold and precious minerals sector, which may be more volatile than other industries and influenced by changes in commodity prices driven by international economic and political developments. The Company is a non-diversified fund, which may result in higher risk through reduced portfolio diversification. It may also invest in smaller-sized and foreign companies, which may be more volatile, less liquid, and subject to additional risks, including currency fluctuations. Shares of closed-end funds like ASA frequently trade at a discount to net asset value.
This website may include forward-looking statements that reflect the current expectations, estimates, beliefs, and projections of Axel Merk. These statements are inherently subject to risks and uncertainties, many of which are beyond the control of the author. Actual outcomes may differ materially from those discussed. Forward-looking statements can often be identified by words such as “believe,” “expect,” “intend,” “may,” “will,” “should,” or similar expressions. These statements speak only as of the date made, and there is no obligation to update or revise them in light of future developments.
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