Just wanted to weigh in on the idea of counterfeiting shares that the original poster raised. There's an important distinction that i don't think has been made.
Regular short selling: does not create new shares, shares are borrowed, sold, then repurchased at a hopefully lower price.
'Naked' short selling: I think this was described in a previous post in a round about way. The shorter sells shares he does not own without borrowing them first, i.e. pulls them out of thin air. In theory the shorter must produce the shares by the time the trade settled (3 days later) but in the real world this may not happen. This does create additional shares for at least the 3 days and potentially an unlimited amount of them.
Naked short selling was banned on the ASX in 2008. See link below:
https://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwjo4NGn48vKAhVFW6YKHZgTBcQQFgguMAA&url=http://www.asx.com.au/documents/media/mr_190908_abolition_naked_short_selling.pdf&usg=AFQjCNFbuVVtu5SMCM6pPRW1Wp6xMe1nsw&sig2=AP1PR19w0xd1ebivm6bEMw&cad=rja
Some Naked shorting may still happen illegally, but this is a different story. We must make the assumption that the shorting of SGH is all legal and is not 'Naked' which means that this aspect of the OP's letter to ASIC is incorrect.
Apologies if this has already been pointed out in this thread... I stopped reading after people started talking in circles. I think it may not have been though since a text search in the thread for the word 'naked' returned no results
