On Share Repurchase

Whether to legalize share repurchase depends not on the logic of law theories, but on the policies considered by lawmakers. If the company can pursue its proper economic purpose only by share repurchase, the law should make an exception there. Share repurchase may do harm to the principle of capital maintenance, destroy the equality among shareholders, or result in inside trading or market manipulation. Company law should limit the manner and procedure of the behavior of repurchase in view of internal corporation governance. Securities law should require mandatory disclosure during share repurchase to safeguard the normal order of securities trading.