Share Buyback Scheme An Unexplored Corporate Management Tool

INTRODUCTION

A share buyback occurs when a company repurchases its shares from its shareholders. It is a situation where a company is investing in itself. In the past, this had given room to unscrupulous managers and promoters of companies to perpetrate fraud by creating an artificial buoyancy of the shares of companies and encourage dangerous speculative trading of shares by buying back shares through loans and luring the unsuspecting general public into dealing in those shares under the erroneous financial health of the companies created by them.

Yet, share buyback could also serve as a legitimate corporate management tool to deliver more value to a company's shareholders and stakeholders in the capital market. In fact, it could be positively employed by a company to achieve including but not limited to: