Ann: Change in substantial holding, page-29

I initially didn't think Gina would want to make a counter offer, because she must know she can't afford our asking price. But with this short selling business, I'm starting to realise this could be a very shady way for any large whale to come in and acquire shares from those who don't want to transfer ownership. If Gina can keep buying shares for $3 she can effectively own a very large chunk at the asking price of $3 and then offer a higher price for the rest of the shares, which the board will approve. The more she can buy at $3, the less she has to worry about paying up for the rest. This has me a little worried.

I don't fully understand the intricacies of short selling, so I'd like to ask anyone that does to please explain it to me, how does Short Selling transfer ownership of the original shareholder on to those buying from Short Sellers? It sounds like it should be illegal.