Investor: Companies Should Be Forced To Buy Back Shares At Preset Prices

21 November 2014

The Straits Times published a letter from one Koh Cheng Soon on 20 November 2014 suggesting that listed companies be required to buy back shares at a price fixed at a percentage of its initial public offering price, to provide assurance to investors.

If the number of investors who wished to sell their shares back to the company exceeded a predetermined percentage, the company would be delisted.

Since Mr Koh gave the example of setting the so-called committed surrender value at 20 per cent of the initial public offering price, I wonder why he (and like-minded investors) would not have sold their shares earlier, instead of waiting till they fell to that low level.

In any case, I don't know which established stock market has such practice.

Perhaps, Mr Koh should not invest in shares.