Korea Asia Fund Ld

Frthr re Proposed Liquidation

Korea Asia Fund Ld
6 November 2000


RECOMMENDED PROPOSAL FOR THE WINDING UP OF THE COMPANY


SUMMARY OF PROPOSAL

     The  Board proposes the voluntary winding up of the Company
  and the appointment of the Liquidators.

    If the Proposal is approved, the Company's portfolio will be
  realised and all liabilities will be established and discharged.

    In liquidating the Portfolio, the Liquidators have indicated
  that  they  would seek to act so as to ensure  an  orderly  and
  controlled  realisation  of the Company's  assets  as  soon  as
  practicable  following liquidation. Market conditions  and  the
  regulatory  regime  in  Korea may  affect  the  timing  of  the
  realisation of the portfolio and the conversion and remittance of
  funds outside Korea.

     Subject to the above, and after setting aside a reserve  in
  respect  of  the  costs of liquidation and the Company's  known
  actual  and  contingent liabilities, the Liquidators  would  be
  hopeful of making an interim distribution of available net cash
  proceeds to Shareholders within four weeks of the commencement of
  liquidation.


BACKGROUND TO THE PROPOSAL

It  was  announced on 25th September, 2000 that the  Board  would
present  to  Shareholders a proposal for the winding  up  of  the
Company.   This  announcement  provides  the  background  to  and
details of the Proposal.

The  Company was incorporated in 1990 as one of only three closed
ended funds with a local licence providing exposure to the Korean
stockmarket  for  non-Korean investors. Since  incorporation  the
Company  has  achieved a successful record  of  Net  Asset  Value
performance and has outperformed its benchmark index, KOSPI, over
the  period.  However, recently the Company's shares have  traded
at a discount to Net Asset Value per Share.

The  Board has therefore been actively considering for some  time
the  enhancement of Shareholder value and a number  of  different
possibilities have been discussed by the Board during that  time.
These included repurchase of the Company's Shares, authority  for
which  was  granted by Shareholders in 1999 and  renewed  at  the
Annual General Meeting on 27th September, 2000.

In  August  of this year an institution claiming to be interested
in  approximately 10 per cent. of the Company's Shares approached
the  Board  and  published a paper in which  it  called  for  the
opportunity  to  realise shareholder value in  the  Company.  The
paper contained proposals for the surrender of the Licence and  a
capital restructuring to enable in specie redemptions by transfer
of  part  of the Company's portfolio at Net Asset Value,  such  a
right  to redemption remaining an integral part of the continuing
fund.

The  Board  considered  carefully  the  proposal  put  forth  but
concluded,  after  taking advice, that  for  both  practical  and
technical reasons it was not viable. The Board also considered  a
number  of other possible courses of action, including continuing
with  the  status quo or winding up the Company and  transferring
its assets into one or more successor funds.

Central  to  this process was contact by the Board,  through  its
financial advisers, HSBC, with institutions believed to represent
a  large  majority of the Company's Shares and  IDRs,  to  obtain
their  views on the future direction of the Company. Most of  the
institutions contacted by HSBC expressed a desire for a cash exit
from the Company. A number of institutions expressed a desire  to
continue as investors in the Company or a successor fund  on  the
basis  that  they  would only wish to do so if the  size  of  any
ongoing  fund  was sufficiently large, failing which  they  would
favour an exit for cash.

After  lengthy  and careful consideration, the  majority  of  the
Board  decided on 25th September, 2000 that it was  in  the  best
interests  of  Shareholders and holders of IDRs  as  a  whole  to
propose the winding up of the Company.

THE PROPOSAL

Under  the  Proposal,  the Company will  be  placed  in  members'
voluntary  winding up on the passing of the Resolution.  At  that
point, under Cayman Islands law (which will govern the winding up
of  the  Company), the Directors will cease to be  authorised  to
manage  the  Company  and control will pass to  the  Liquidators.
Accordingly, what follows in the remaining paragraphs will not be
within  the  power  of  the Directors,  but  sets  out  what  the
Directors believe to be the present intentions of the Liquidators
(assuming  that the persons named in the Resolution are appointed
as  liquidators of the Company and remain in office as such).  It
must  be  understood,  however,  that  the  Liquidators  take  no
responsibility for this announcement and cannot be bound  by  it,
particularly given the possibility of changing markets and  other
circumstances.

In liquidating the portfolio, the Liquidators have indicated that
they  would seek to act so as to ensure an orderly and controlled
realisation  of  the  Company's assets  as  soon  as  practicable
following  liquidation.  Market  conditions  and  the  regulatory
regime  in Korea may affect the timing of the realisation of  the
portfolio  and  the conversion and remittance  of  funds  outside
Korea.  Whilst  the  Board  might have  otherwise  commenced  the
realisation process, the terms of the Licence do not  in  general
permit this. After discussion with the Liquidators, the Board has
instructed  the  Investment Manager to begin  taking  appropriate
steps  to  assist  in the orderly realisation  of  the  Company's
portfolio.

The  Directors  have  discussed with the Liquidators  the  likely
amount   and   timing  of  distributions  to  Shareholders.   The
Liquidators have indicated that they would be hopeful of making a
first  distribution  to Shareholders within  four  weeks  of  the
commencement of liquidation in an amount equal to such  net  cash
proceeds  from the disposal of investments as are then available,
less known actual and contingent liabilities of the Company.  The
registered  Shareholders  will be responsible  for  passing  this
distribution on to any underlying investors or holders  of  IDRs,
as applicable.

The   Liquidators  envisage  making  a  second  distribution   to
Shareholders  shortly  after  the  disposal  programme  has  been
substantially completed. A third distribution would  be  made  on
completion of the liquidation. The Liquidators expect,  based  on
current  knowledge and circumstances, that the third distribution
will  be  final,  but further distributions may  prove  necessary
depending on the progress of the realisation of the portfolio.

Before  any  cash is distributed to Shareholders, the Liquidators
have indicated that they would set aside cash or other assets  to
provide  for  known  accrued  or  potential  liabilities  of  the
Company, including provision or reserve for:

     any  liabilities  arising under or in connection  with  the
  Company's contracts, including those with the Investment Manager,
  the Registrar, the Custodian and the Depositary;

    any liabilities to taxation;

     all  other  accrued  liabilities of the Company,  including
  fees, costs and expenses incurred by the Company in formulating,
  preparing and implementing the Proposal and associated documents;

     the costs and expenses of winding up the Company, including
  the fees and expenses of the Liquidators;

     any  other  amounts  considered by the  Liquidators  to  be
  appropriate to provide for any contingencies.

To the extent that any part of the cash or other assets set aside
was   not   required  to  meet  the  Company's  liabilities   and
liquidation  costs, any balance remaining in  the  hands  of  the
Liquidators would be distributed to Shareholders in due course.

IDR HOLDERS

The  Deposit  Agreement may be terminated  on  90  days'  written
notice.  The  following summary of the treatment of  IDR  holders
assumes  that  the Deposit Agreement remains in force  throughout
the winding up of the Company, though this may not be the case.

The  Deposit Agreement provides that amounts distributed  upon  a
liquidation  of  the Company will be paid to IDR holders  in  the
same way as any other distribution. The Depositary is obliged  to
notify  the  IDR  holders of such payment as soon  as  reasonably
practicable,  specifying the amount payable per deposited  Share.
Such notification is required, if practicable, to be made no more
than  14  days  after the distribution has been received  by  the
Depositary  or  its  agent. IDR holders would  then  present  the
coupon  specified  in  the  notice from  the  Depositary  at  the
Depositary's specified office (or at the office of  such  of  its
agents  as  it  may  specify) in order to  receive  the  relevant
distribution.

Any  distribution remaining unclaimed at the end of 12 years from
the date on which the distribution had been made available to IDR
holders would be retained beneficially by the Depositary.

FACTORS AFFECTING REALISATION PROCEEDS

The  Net  Asset Value of the Company on 2nd November,  2000  (the
latest  practicable  date  prior  to  the  publication  of   this
announcement) was US$238,911,750.

The  costs  to  be  incurred by reason of the  Proposal  and,  if
approved, the subsequent winding up of the Company, are estimated
to  be  approximately US$825,000. This estimate does not  include
any costs associated with the realisation of the Company's assets
or  any  amount in respect of taxation. This estimate  disregards
the   cost   of  servicing  existing  contracts,  including   the
Investment Management Agreement, during the period subsequent  to
the   appointment  of  the  Liquidators,  or  any  costs  of   or
liabilities from terminating such contracts.

There  are a number of factors not currently known to, or  within
the control of, the Liquidators which may affect the total amount
to be distributed to Shareholders, including, but not limited to:

     Performance of the Korean stock market. Investors should be
  aware that the value of securities can go down as well as up. The
  price at which the Liquidators realise any particular investment
  is likely to be affected by the performance of the Korean stock
  market generally;

     Accelerated  nature of the sale. Although  the  Liquidators
  have indicated that they would seek to act so as to achieve  an
  orderly  and  controlled realisation of the  Company's  assets,
  securities  will be sold which might otherwise, if the  Company
  were  not  winding up, be held as longer term investments.  The
  amount realised on the disposal of any such securities might be
  less than the price they would ordinarily realise had the fact of
  the Company's winding up not been announced;

     Nature  of  the  portfolio. A small part of  the  Company's
  portfolio consists of less liquid securities which in particular
  may be disposed of at a price lower than the value that would, on
  a going concern basis, have been attributed to those securities
  for the purposes of calculating Net Asset Value;

     Currency  risk.  The  principal  foreign  currency  of  the
  Company's  underlying investments is Korean won. The  Company's
  reporting currency is US dollars. The proceeds of the realisation
  of  the  portfolio will be converted from Korean  won  into  US
  dollars  before being distributed to Shareholders. Shareholders
  should  be aware that the exchange rate may fluctuate over  the
  period.

      Taxation.   Based   principally  on   certain   management
  information, the Directors believe that the Company conducted its
  affairs during the year to 31st March, 2000 so as to satisfy the
  criteria to be eligible for investment trust status in respect of
  that  year,  and that it will have continued to do so  for  the
  period  commencing  on  1st  April,  2000  and  ending  on  the
  commencement of the winding up. However, formal approval as  an
  investment trust is ultimately a matter to be determined by the
  taxation authorities.

     Liabilities  under  contracts. The precise  extent  of  the
  Company's liability under or in the event of termination of its
  contracts may not be known. The amount of such liability  would
  depend upon the time it takes to realise the portfolio, the time
  at which the Liquidators choose to terminate the contracts (if at
  all), whether counterparties choose to terminate contracts, and
  any agreements the Liquidators may reach with the other parties
  to any of the contracts.

SHAREHOLDER APPROVAL AND ACTION TO BE TAKEN

The  implementation  of  the Proposal requires  the  approval  of
Shareholders at the EGM convened for 4.00 p.m. (London  time)  on
27th November, 2000 (or at any adjournment thereof). In order  to
be passed at the EGM, the Resolution will require the approval of
three-quarters  of  the  votes cast by Shareholders  present  and
voting,  in person or by proxy. In accordance with the  Articles,
on  a  show  of  hands every Shareholder present  in  person  and
entitled to vote will have one vote. On a poll, every Shareholder
present in person or by proxy will have one vote for every  Share
held.   If the Proposal is approved it will bind all Shareholders
whether or not they have voted in favour of the Proposal  at  the
Meeting.  If  the  Proposal  is not approved,  the  Company  will
continue in existence.

INVESTORS  HOLDING  SHARES,  DIRECTLY  OR  THROUGH  EUROCLEAR  OR
CLEARSTREAM, LUXEMBOURG

Registered  Shareholders  in  the Company  should  complete,  and
persons   who   own  Shares  indirectly  through   Euroclear   or
Clearstream,  Luxembourg should request Euroclear or Clearstream,
Luxembourg  (or, if applicable, the broker or other  intermediary
to  whose  account at Euroclear or Clearstream,  Luxembourg  such
Shares   are  credited,  to  request  Euroclear  or  Clearstream,
Luxembourg) to arrange for its nominee Shareholder to complete, a
Proxy Form for the Extraordinary General Meeting and return it to
Aquis  Court,  31 Fishpool Street, St. Albans, Hertfordshire  AL3
4RF  (marked for the attention of Mr. Steve Martin)  as  soon  as
possible  and, in any event, so as to arrive not later than  4.00
p.m. (London time) on 25th November, 2000.

Completing  Proxy Forms will not preclude registered Shareholders
from  attending  the EGM and voting in person  (or  by  corporate
representative) if they wish to do so.

INVESTORS HOLDING SHARES IN THE FORM OF IDRS, DIRECTLY OR THROUGH
EUROCLEAR OR CLEARSTREAM, LUXEMBOURG

The  votes  attributable to Shares held  in  the  form  of  IDRs,
whether   directly   or  indirectly  through   Euroclear   and/or
Clearstream, Luxembourg, can only be exercised by the  Depositary
(or  its  nominee) as the registered Shareholder, or by  a  proxy
appointed  by  it.  The  Depositary (or such  nominee)  will  not
exercise  voting  rights  or  appoint  a  proxy  without  express
instructions  from  the relevant IDR-holder in  relation  to  the
underlying Shares.

In  the  case  of those IDRs that are held through  Euroclear  or
Clearstream, Luxembourg, the instructions to the Depositary  must
come from the clearing system (or other person recognised by  the
Depositary  as the holder of the relevant IDRs). Therefore,  each
underlying owner of IDRs should make arrangements for its brokers
(or  other  account-holding participant in the relevant  clearing
system)  to  require  the clearing system to give  the  necessary
voting or proxy instruction to the Depositary.

INSTRUCTIONS TO CLEARING SYSTEMS

Persons  holding Shares or IDRs through Euroclear or Clearstream,
Luxembourg  should require the relevant clearing system  and  the
Depositary (in the case of IDRs) to give the necessary voting  or
proxy  instruction  within the above time  limit.  The  Directors
cannot  be  held  responsible for any failure  to  lodge  proxies
within the specified time.

It is important to note that, without the correct instructions to
the relevant clearing system from the account-holding participant
(and,  in  the  case  of  IDRs, the onward  notification  by  the
clearing system to the Depositary) votes will not be able  to  be
exercised  and the Proposal could consequently fail through  want
of votes to pass the Resolution.

Instructions to Euroclear and/or Clearstream, Luxembourg must  be
made   via   their  electronic/telex/SWIFT  instruction  systems.
Instructions  sent  to Euroclear or Clearstream,  Luxembourg  are
requested   by   them   to   be   received   before   4.00   p.m.
(Brussels/Luxembourg time) on 21st November,  2000.  Instructions
sent to Euroclear via EUCLID are requested by them to be received
before  4.00  p.m. (Brussels/Luxembourg time) on  21st  November,
2000.  These instructions must be given by the actual participant
in   whose  Euroclear  or  Clearstream,  Luxembourg  account  the
relevant   Shares  or  IDRs  are  held.  On  receipt   of   these
instructions    Euroclear   or   Clearstream,   Luxembourg,    as
appropriate,  have indicated that they will respectively  (a)  in
the case of Shares, complete (or cause its nominee to complete) a
Proxy  Form  in  respect of those Shares in accordance  with  the
voting instructions received from the account-holding participant
and  (b)  in the case of IDRs, advise the Depositary to  complete
(or cause its nominee to complete) a Proxy Form in respect of the
Shares  represented by those IDRs in accordance with  the  voting
instructions received from the account-holding participant.

If  any  assistance  is  required please  contact  the  following
Depositary   and/or  Euroclear  and/or  Clearstream,   Luxembourg
helplines:

Depositary Helpline:
Ms. Veronique Cridel/Hilary Durst
Tel: + 352 46 26 85 284/236
Fax: + 352 46 26 85 380
Email:    [email protected]
Email:    [email protected]

Euroclear Helpline:
Veerle Bossaerts
Tel: + 322 224 1425
Fax: + 322 224 1459
Email:    [email protected]

Clearstream, Luxembourg Helpline:
Bernard Lecaillon
Tel: + 352 46 56 4 407
Fax: + 352 46 56 48 254

STOCK EXCHANGE DEALINGS AND SETTLEMENT

If the Resolution is passed without adjournment, the last day for
dealings  on the London Stock Exchange in the Shares  for  normal
account settlement will be 17th November, 2000. Dealings  on  the
London  Stock Exchange in the Shares are expected to be suspended
with effect from 4.30 p.m. (London time) on 27th November, 2000.

In order to maintain the Company's investment trust status, it is
expected  that the listing for the Shares will not  be  cancelled
until  the  realisation of the Company's portfolio  is  complete.
Such  maintenance  of the listing is in accordance  with  current
practice. However, Shareholders and IDR holders should  be  aware
that this is a matter that is ultimately at the discretion of the
UKLA.

Any  purported  transfer of shares after  the  Company  has  been
placed  in  liquidation without the sanction of  the  liquidators
will be void.

DIVIDEND

It  is the present intention of the Directors that no dividend be
payable in respect of the period from 1st April, 2000 to the date
of the EGM.

OTHER COLLECTIVE INVESTMENT FUNDS SPECIALISING IN KOREAN EQUITIES

In  its  announcement  made on 25th September,  2000,  the  Board
indicated  that it would provide information on other  collective
investment funds specialising in Korean general equities. Part II
of the circular posted to Shareholders contains a list of some of
the  collective  investment funds which the Directors  understand
specialise in Korean equities. This information is compiled  from
publicly  available  information  and  the  Directors   make   no
representation as to its accuracy or completeness. The  Directors
are  not  authorised to, and do not, make any  recommendation  to
Shareholders as to investment in Korean equities generally or  in
relation  to any particular fund, whether specialising in  Korean
equities  or  otherwise.  Shareholders  should  seek  their   own
personal  financial advice from their stockbroker, bank  manager,
solicitor,  accountant or other professional  adviser  authorised
under the Financial Services Act 1986.

EXPECTED TIMETABLE

Suggested  latest time for receipt of instructions  by  Euroclear
and Clearstream, Luxembourg
4.00 p.m. (Brussels/Luxembourg time) on 21st November, 2000

Suggested latest time for receipt of instructions by Depositary
4.00 p.m. Luxembourg time on 23rd November, 2000

Latest  time  for receipt of Form of Proxy for the  Extraordinary
General Meeting
4.00 p.m. (London time) on 25th November, 2000

Extraordinary General Meeting
4.00 p.m. (London time) on 27th November, 2000

Dealings in Shares suspended
4.30 p.m. (London time) on 27th November, 2000


QUERIES

Steve Martin
KPMG (Company Secretarial Advisors)
Tel. 01227 733102

Tom Durie
HSBC Investment Bank plc (Broker to the Company)
Tel. 020 7336 2004


Notes:

Definitions used in this announcement shall have the same meaning
as set out in the Circular despatched to Shareholders.

HSBC  Investment Bank plc, which is regulated by  The  Securities
and  Futures  Authority Limited, is acting for  Korea  Asia  Fund
Limited and for no-one else and will not be responsible to anyone
other  than Korea Asia Fund Limited for providing the protections
afforded  to  customers  of  HSBC  Investment  Bank  plc  or  for
providing  advice  in  relation to the  Proposal  or  any  matter
referred to in this announcement.