Rethinking Share Repurchases

NUS Law Working Paper No. 2020/017

EW Barker Centre for Law & Business Working Paper 20/07

36 Pages Posted: 10 Jun 2020 Last revised: 9 Feb 2021

See all articles by Hans Tjio

Hans Tjio

National University of Singapore (NUS) - Faculty of Law

Date Written: June 8, 2020


Share buybacks have been widely used around the world for a long time now. This was once seen as a form of market abuse in the US. A recent Singapore decision suggested that buybacks to counter a short-selling attack may constitute market manipulation although the Court of Appeal affirmed the decision on the basis that the statutory requirements for a buyback were not met. But those requirements have been liberalized over the past 20 to 30 years although a line should be drawn in the sand with the need for a solvency statement. Not being fully proprietary, repurchased shares should not be kept on the balance sheet. The proper purpose rule, which applies to changes of capital should also apply to share repurchases to only allow buybacks when the company has no need for financing taking into account all possible exigencies. The repurchase price should also be the lowest possible as is the case for normal buyers.

Keywords: Share Buybacks, Market Manipulation, Capital Maintenance, Proper Purpose Rule, Company Law, Securities Regulation

Suggested Citation

Tjio, Hans, Rethinking Share Repurchases (June 8, 2020). NUS Law Working Paper No. 2020/017, EW Barker Centre for Law & Business Working Paper 20/07, Available at SSRN: or

Hans Tjio (Contact Author)

National University of Singapore (NUS) - Faculty of Law ( email )

469G Bukit Timah Road
Eu Tong Sen Building
Singapore, 259776

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