Response to Laxey Announcemnt

Baring Emerging Europe Trust PLC
4 September 2002


The following letter to shareholders will be posted today:

'THIS LETTER IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to the action you should take, you should consult 
your independent professional adviser authorised under the Financial Services 
and Markets Act 2000 immediately.

4 September 2002 

Dear shareholder

Unsolicited proposals to change the Board: Response to Laxey announcement

In my letter to you dated 30 August 2002 I said that Laxey Partners (UK) Limited
('Laxey') had not attempted to clarify its intentions towards your Company in 
seeking to change the composition of the Board at the forthcoming AGM. You will 
recall that the proposals ('the Laxey resolutions') seek the removal of John 
Cousins as a director and any other director appointed after 2 August 2002, and 
propose the appointment of three new Laxey nominees.

At the time of posting of my earlier letter Laxey had still not clarified its 
intentions, although at the Company's recent EGM it voted its shares against the 
special resolution to renew the power to repurchase the Company's shares. The 
majority of shareholders who voted were in favour of the resolution but since a 
75% majority was required the resolution failed. Laxey voted against the 
resolution despite having benefited from the use of the earlier repurchase 
authority when it sold 9.3 million shares to the Company for cancellation on 
25 July 2002.

On 2 September Laxey made an announcement on the Bloomberg information service.
Although the Board believes this adds nothing material to the debate, there was 
one point that I think deserves comment.

Laxey's announcement refers to the need to reconcile differences between certain
interested parties and lists these parties as the shareholders, the 
warrantholders and the Board. In fact the Board is not an interested party whose
interests need to be reconciled with the others. It is an independent body whose
role is to serve the interests of all shareholders, whose views may differ 
considerably. As I pointed out in my letter of 30 August, the Board has already 
made an effort to reconcile the differences between those shareholders wanting 
an early exit and those who take a longer-term view and accept the present 
closed-end structure of the Company. Unfortunately, this effort, in which Laxey 
was involved, did not succeed.

I wish to emphasise that the Board remains willing to discuss any new proposals 
designed to reconcile these varying interests, before or after the AGM, and 
would treat any new proposals impartially. However, the election of three Laxey 
representatives to the Board will not assist this process. Instead it will set 
up a conflict of interest, as the loyalty of Laxey's representatives, Colin 
Kingsnorth and Rupert Lea, to Laxey will be at odds with their obligation to 
serve the interests of all shareholders impartially.

The Board is more than content to defend the Company's record of a compound 
annual growth of net assets of 17% since 1994; it is not in obvious need of 
restructuring. Since the shares owned by Laxey will almost certainly be voted, 
the Board continues to urge you to vote AGAINST the Laxey resolutions and FOR 
the re-election of Prince Abbas Hilmi and Charles Harman as directors.

Yours faithfully 

Sir William Ryrie
Chairman

If you have sold or transferred all of your shares in The Baring Emerging Europe
Trust PLC, please forward this letter to the purchaser or to the stockbroker, 
bank or other agent through whom the sale or transfer was effected, for 
transmission to the purchaser or transferee.'

Further enquiries please contact:

Patrick Toyne-Sewell 
Citigate Dewe Rogerson 
London Wall Buildings 
London EC2M 5SY 
Tel: [phone]



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