more shady disclosure by anz, page-7

Obviously ANZ did not understand the implications of borrowing shares; as it seems to have done.

AS is now often mentioned here and in other places, borrowing securities involves and absolute sale of those securities and the transfer of those securities to the borrower.

The borrower is then free to sell the borrowed securities and only has an obligation to return equivalent (but not the identical) securities.

In this transaction the relevant interest in the securities is transferred to the borrower. Therefore the borrower becomes the substantial shareholder and is required to lodge substantial shareholder notices as ANZ has belatedly recognised.

The weekend press has got this wrong about Murphy. Murphy, ANZ and others may have believed Murphy had an obligation to lodge substantial shareholder notices. Howerver if his shares where subject to a securities lending agreement, this is incorrect. The Borrower has the relevant interestb but only while the borrower is the registered owner. The borrower can sell borrowed stock and then neither the lender nor the borrower have any interest at all in that stock.

It seems a fair argument that ANZ has a duty to the investing community to observe the law and keep the market informed. Failure to do so is a breach of that duty and may constitute a tort giving rise to damages.

If ANZ had correctly informed the market of its substantial interests in the shares it had borrowed the market would have become aware of the misconceptions about the ownership of borrowed stock a long time ago and then perhaps all this could have been avoided.

the corollory is that these directors who have informed the ASX of holdings in companies where they have lent the shares to fund the purchase have in fact misled the market. They have not relevant interest in lent stock.