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August 21, 2013

Mr Gokhan Oguzhan
ASIC Analyst
Misconduct and Breach reporting

Dear Sir
Further to my complaint of last Friday (i.e., Aug 16), in which Section 9 pointed out serious anomalies
concerning the system of short selling, I would like to draw your attention to the shorting activity that took
place yesterday (i.e., Aug 21) in relation to CuDeco.
Trading volumes totalled 15,387,060 shares for the day which comprised special crossings of 12,817,058
shares put through after the close of trade.
Of the 2,570,002 shares sold in the course of normal trading, short sales amounted to 1,529,509 shares.
Short sales therefore represented an astonishing 59.5% of all selling transactions.
The short selling is clearly an indication of insider activity, with the entities responsible in all likelihood
knowing that a large crossing was about to hit the market. The situation needs to be followed up on
immediately as the buyers of shares, or their associates, may also have been responsible for the high levels
of shorting. The short selling would have hugely impacted the market and created an artificial trading
environment for all other investors.
Also, the level of short selling yesterday is highly anomalous compared to the levels of short selling on all
other days that M&G sold-down their holding. The accompanying table shows that short sales averaged
19.7% of daily ASX volumes on the days that M&G sold shares with a prior maximum of 38.2% on June 20.
Day

ASX Daily Volume

Short Sales

Shorts %

M&G Sell Volumes

Shorts cf M&G Sales

Jun 12
Jun 13
Jun 14
Jun 17
Jun 18
Jun 19
Jun 20
Jun 21
Jun 24
Jun 25
Jun 26
Jun 27
Jun 28
Jul 1
Jul 2
Jul 3
Jul 4
Jul 5
Jul 8
Jul 9
Jul 10
Jul 11
Jul 12
Jul 15
Jul 16
Jul 17

532,349
549,328
332,178
459,047
1,272,786
586,348
1,650,125
1,042,183
1,023,391
903,145
547,345
661,315
2,380,102
1,313,567
1,446,141
1,237,856
1,379,944
1,386,629
1,207,318
1,577,061
1,308,447
1,052,577
916,240
599,902
563,226
625,747

37,306
172,721
68,626
73,588
304,144
61,580
631,050
160,223
149,567
275,927
128,071
118,122
480,339
454,863
466,232
460,556
403,840
444,685
266,019
466,107
290,886
110,535
70,137
116,752
26,944
17,192

7.0%
31.4%
20.7%
16.0%
23.9%
10.5%
38.2%
15.4%
14.6%
30.6%
23.4%
17.9%
20.2%
34.6%
32.2%
37.2%
29.3%
32.1%
22.0%
29.6%
22.2%
10.5%
7.7%
19.5%
4.8%
2.7%

219,186
170,000
120,000
143,648
256,352
170,000
500,000
657,316
405,684
240,000
160,000
220,000
582,746
387,254
500,000
200,000
360,000
430,000
451,325
645,275
366,000
392,548
297,452
165,000
281,266
223,734

17.0%
101.6%
57.2%
51.2%
118.6%
36.2%
126.2%
24.4%
36.9%
115.0%
80.0%
53.7%
82.4%
117.5%
93.2%
230.3%
112.2%
103.4%
58.9%
72.2%
79.5%
28.2%
23.6%
70.8%
9.6%
7.7%

Day

ASX Daily Volume

Short Sales

Shorts %

M&G Sell Volumes

Shorts cf M&G Sales

Jul 18
Jul 19
Jul 22
Jul 23
Jul 24
Jul 25
Jul 26
Jul 29
Jul 30
Jul 31
Aug 1
Aug 2
Aug 5
Aug 6
Aug 13
Aug 14
Aug 15
Aug 16
Aug 19

662,798
1,257,549
1,401,576
1,564,052
977,215
1,114,901
962,952
1,095,189
856,407
962,904
645,414
806,125
800,068
649,314
2,556,847
2,303,642
1,624,503
1,844,313
1,428,396

29,261
90,338
116,538
326,251
118,915
215,514
217,447
197,348
198,016
235,078
159,832
117,102
210,020
180,387
421,741
278,817
393,402
251,956
162,618

4.4%
7.2%
8.3%
20.9%
12.2%
19.3%
22.6%
18.0%
23.1%
24.4%
24.8%
14.5%
26.3%
27.8%
16.5%
12.1%
24.2%
13.7%
11.4%

280,000
600,000
1,045,717
484,283
277,979
322,021
310,000
324,662
235,338
314,963
185,037
450,000
350,000
200,000
905,000
745,000
311,343
522,609
239,336

10.5%
15.1%
11.1%
67.4%
42.8%
66.9%
70.1%
60.8%
84.1%
74.6%
86.4%
26.0%
60.0%
90.2%
46.6%
37.4%
126.4%
48.2%
67.9%

Average 19.7%

A dramatic escalation in short sales to 59.5% of daily volumes yesterday, is seen to be a clear indicator of
entities attempting to capitalize on something taking place behind the scenes; something obviously not
known to the general investing public.
Additionally, high levels of short selling has accompanied nearly all selling by M&G as shown by the column
comparing the levels of daily short sales to the levels of M&G selling. It appears that M&G interests, their
affiliates or even their associates, have been front running the sell-down of the M&G holding. Entities are
likely to have profited by short selling by selling into the market ahead of the M&G selling, with the M&G
selling then providing an opportunity to cover.
Even so, all short sales havent been covered as the open short interest increased by 2,438,979 shares
between June 12 when the M&G selling started, and August 12, (i.e., a period of 2 months). The trend
suggests that insiders were confident that shares would always be available to cover, again suggesting a
compromised, unfair market.
Importantly, the entire sell-down of the substantial holding undertaken by M&G, is contrary to the recent
High court decision in respect of the actions normally associated with genuine sellers.
Refer Appendix 1, Pg 132 of last Fridays complaint
The forces of genuine supply and demand are those which are created in a market by buyers whose
purpose is to acquire at the lowest available price and sellers whose purpose is to sell at the highest
realisable price.
It would appear that the selling was serving purposes other than attempting to obtain maximum value for
the holding, and therefore identifies strongly with share price manipulation as defined by the High Court.
I again seek an urgent resolution to all matters raised including a full investigation into yesterdays highly
dubious trading activity, and indeed, the selling engaged in by M&G over the period June 12 to August 22,
2013.