short selling scam at primary

Primary is currently completing a big rights issue.
Shareholders at the record date got the right to buy 8 new shares at a discount price for each 5 they held. This is both a privilege and a burden for shareholders, you get cheaper shares but you have to find the money to pay for them. The right to buy the new shares is a valuable right and often tradeable ( but not in this case ).

Here is the scam with Primary:

Insto super fund "A" owns 5 million PRY shares. They lend them to hedge fund "B" who sells them ( a short sale which is not officially a short sale ) to unsuspecting insto "C".

It would appear that both insto "A" and insto "C" can then go up to PRY and ask for 8 million cheap new shares. Both of them can. Its a scam against other shareholders.

See section 2.9 of the PRY rights issue prospectus.