The Value of Fiduciary Duties : Evidence from En Bloc Sales in Singapore

Research output: Conference Papers (RGC: 31A, 31B, 32, 33)32_Refereed conference paper (no ISBN/ISSN)peer-review

View graph of relations

Author(s)

Related Research Unit(s)

Detail(s)

Original languageEnglish
Publication statusPublished - 2 Jun 2018

Conference

TitleAssociation for Law, Property and Society 9th Annual Meeting
LocationMaastricht University
PlaceNetherlands
CityMaastricht
Period31 May - 2 June 2018

Abstract

We explore the impact of the legal doctrine of fiduciary duties on market valuation in collective sale of residential real estates, the en bloc sales, in Singapore. The causal relation is established using a unique legal shock in 2009, the Ng Eng Ghee v. Mamata Kapildev Dave case decided by the Singapore Court of Appeal. We find that the judicial establishment of fiduciary duties in the en bloc sale process raises the price of these sales compared to units not subject to the en bloc sale scheme and units eligible for en bloc sales but sold individually. Furthermore, this valuation effect is stronger for projects with more severe agency problem proxied by high ownership turnover. Finally, an event study shows that the rule change also has positive valuation impact on buyers in en bloc sales, therefore possibly enhancing the overall social welfare. Our study highlights the importance of judicial oversight in nonconsensual land assembly mechanisms, and presents a rare piece of empirical evidence illustrating the practical impact of fiduciary duties in forced sales.

Citation Format(s)

The Value of Fiduciary Duties : Evidence from En Bloc Sales in Singapore. / Hu, Jianfeng; Low, Kelvin; Zhang, Wei.

2018. Paper presented at Association for Law, Property and Society 9th Annual Meeting, Maastricht, Netherlands.

Research output: Conference Papers (RGC: 31A, 31B, 32, 33)32_Refereed conference paper (no ISBN/ISSN)peer-review