Ann: Becoming a substantial holder, page-17

I have complained about shorting several times to ASX/ASIC, but no-one will listen. The problem is this :

In normal trading, at any given time there are x shares on issue, and the competition between buyers and sellers is balanced - no matter how many shares are traded there are always the x shares on issue.

But when y shares are sold short, there are x+y shares on issue. [The original owner of the shorted shares still owns them and benefits normally from all dividends etc. But another entity now owns the y shares too, and benefits equally - they have no knowledge that the shares they own.]. That is effectively a dilution, and the share price falls accordingly. So shorting shares itself manipulates the share price downwards. [Without the shorting, the new owner would have had to compete for the x shares in the market. In other words, shorters can simply take new buyers out of the market.]. There are controls on how much a company can dilute without shareholder approval. There are no controls on how much third parties can dilute without shareholder approval. The whole shorting system is manifestly unfair.