Undermining ASA: Saba’s Conduct

New: Institutional shareholder presentation addressing Saba’s campaign and governance issues at ASA.
📎 Institutional Presentation as of May 20, 2025

Saba’s actions raise serious concerns about shareholder choice, board governance, and ASA’s long-term future. Below are key facts that shareholders should understand when considering Saba’s ongoing efforts to control ASA.

Under Bermuda law, directors must act in the best interests of all shareholders—not just those who nominated them. This obligation applies to every board decision, including those that affect shareholder choice and the structure of ASA’s governance. Actions that prioritize narrow interests, or delay shareholder processes like the annual meeting, raise serious questions about whether those duties are being fulfilled.

Since gaining two board seats at ASA’s 2024 annual meeting, the directors nominated and supported by activist investor Saba Capital Management have pursued a strategy of disruption and control. The Saba-nominated directors quickly turned adversarial. In October 2024, they made unsubstantiated allegations against the Legacy Directors, demanded indemnification, and retained separate legal counsel—all at shareholder expense. This unilateral action fractured the board, escalated legal costs, and made meaningful cooperation impossible.

Despite promising new ideas and collaboration, the Saba-nominated directors have contributed none—and instead have worked to block board function, suppress shareholder choice, and advance Saba’s interests without disclosing a long-term plan for ASA’s future.

Since joining the board, the New Directors aligned with Saba have:

• Attempted a board power grab before election results were even certified
• Offered no constructive proposals
• Escalated legal costs dramatically
• Obstructed shareholder access to a truly independent board slate
• Avoided disclosing their long-term vision for ASA

Premature Power Grab Undermined Shareholder Process

In April 2024, following ASA’s annual meeting—but before voting results had been certified—Saba unilaterally declared victory and attempted to seize control of the board. Their two director nominees prematurely claimed authority and “appointed” two new directors, asserting control of the company in clear violation of ASA’s bylaws and the Investment Company Act.

The maneuver was quickly challenged and reversed—but not before triggering legal costs, market disruption, and confusion for shareholders.

The episode offers a revealing preview: Saba is willing to bypass process and assert control without shareholder input.

Governance Gridlock and Suppressed Shareholder Choice

Following the 2024 annual meeting, ASA’s board became evenly split between two Legacy Directors (long-standing directors re-elected by shareholders) and two New Directors (nominated and supported by Saba). Since then:

• As of mid-April 2025, the board has not announced a date for the 2025 annual meeting or advanced a company-backed slate of nominees.
• In September 2024, Saba submitted a slate of four director nominees for the 2025 annual meeting—seeking to expand its influence beyond the two Saba-affiliated directors already on the board. 
• The Legacy Directors have emphasized the importance of allowing shareholders to choose between competing visions for ASA’s future.

This obstruction has had broader consequences. Constructive parties who engaged with ASA — including one who proposed a potential long-term solution to align the interests of all shareholders — were deterred by the hostile environment created by Saba’s directors. These opportunities were lost before meaningful discussions could begin.

Escalating Legal Costs

In October 2024, the New Directors made unsubstantiated allegations against the Legacy Directors. As a result, they retained separate U.S. and Bermuda counsel at ASA’s expense. This prompted the Legacy Directors to do the same. ASA also continues to maintain its own U.S. and Bermuda legal counsel. In total, ASA shareholders are now covering the cost of seven law firms—a direct consequence of the fractured board and escalating conflict.

ASA’s board first adopted a limited-duration shareholder rights plan in late 2023—after several unsuccessful attempts to engage directly with Saba. The intent was to create space for constructive dialogue about the Fund’s future. Rather than engage, Saba filed a lawsuit. While the court later upheld the legality of that initial plan, a subsequent version was invalidated on a technicality. The current plan—adopted in March 2025—remains legally in place. Saba has since filed another lawsuit seeking to overturn it, further escalating conflict and cost.

Importantly, this shareholder rights plan is not the source of ASA’s mounting legal costs. Saba initiated litigation before its board nominees were elected, and most of the rights plan-related defense costs have been covered by insurance. The far more significant expenses stem from Saba-aligned obstruction that has prevented the board from executing basic governance functions.

📎 More details in Sources section

No Plan, No Accountability

Despite Saba’s claims of independence and openness:

• Since joining the board in 2024, Saba-nominated directors have not introduced any publicly disclosed strategic proposals—despite campaign promises of new ideas.
• One of the two New Directors is a partner at Saba, and both have acted in alignment with Saba’s legal strategy and governance tactics.
• Saba also declined to support a board slate aligned with ASA’s traditional investment mandate—nor have they offered any alternative strategy for the Fund’s future.
• Saba has no experience managing a precious metals or gold-focused fund—a notable gap given the specialized nature of ASA’s strategy.

Had ASA already been repurposed into a fixed income fund, shareholders would likely have missed the gold rally that ASA captured under its current strategy—an outcome fundamentally misaligned with the interests of most shareholders who invest in ASA for precious metals exposure. This silence leaves shareholders without the clarity they need to make informed decisions—and highlights what is at stake. Under Bermuda law, directors are required to act in the best interests of all shareholders—not just those who nominated them.

Claims of Independence

Saba has called a special meeting to add a fifth board member—one that only Saba has vetted. Shareholders have no insight into the nominee’s views, qualifications, or plans for the Fund. There has been no opportunity for independent evaluation, no disclosure of any long-term strategy, and no competing vision presented. This is not a path to transparency; it is a consolidation of control.

Saba Capital has demanded a special meeting to add a fifth director to ASA’s Board—potentially giving Saba a controlling majority. Adding another Saba-backed director would undermine shareholder choice and risk repurposing ASA’s investment focus away from precious metals.

Independence matters: if Saba gains a board majority, it could dismantle oversight mechanisms, eliminate committees, and assert full control over ASA’s direction — all without disclosing any long-term vision to shareholders.

On April 30, 2025, Mr. Kazarian filed a legal complaint in Bermuda seeking to challenge shareholder efforts to nominate alternative board candidates and to request court oversight of ASA’s shareholder meetings. If granted, the petition could delay or block competing director slates—potentially enabling Saba’s nominees to proceed without opposition. While the outcome remains pending, the filing introduces additional uncertainty into ASA’s governance process at a critical time.

Let Shareholders Decide

Saba’s conduct has resulted in spiraling legal costs, a stalled board, and a narrowing of shareholder voice.

ASA shareholders deserve more than process games and silence. They deserve the opportunity to choose their fund’s future—and the chance to do so in a transparent, functional governance environment.

Shareholders deserve better. Protecting ASA’s future starts with demanding transparency, accountability, and true independence at every level of governance.