shareholder research blog update, page-33

Hi James,



I am having a bit of trouble trying to comprehend what the 20 million trades were all about when the stock was in voluntary suspension?

Particularly when stock lending requires collateral to be put up by the borrower to protect the lender.

After all the ASIC website informs us:

RG 196.31
"In Australia, securities lending arrangements typically involve the transfer of securities from the owner (lender) to another party (the borrower), with the borrower obliged to return the securities (or their equivalent) either on demand or at the end of the loan term. The borrower usually gives the lender collateral as security for the loan."


I would have thought that if proper collateral is lodged the lender is secured whether the stock is trading or not.

Maybe the large volumes of trades were a pass the parcel exercise to cover a large illegal short position using stock borrowed from the pool of funds under management?

Can anyone elaborate?



cheers

Max