8/12/2019 ASIC Complaint 5

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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 averaged19.7% 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 12 532,349 37,306 7.0% 219,186 17.0%

Jun 13 549,328 172,721 31.4% 170,000 101.6%

Jun 14 332,178 68,626 20.7% 120,000 57.2%

Jun 17 459,047 73,588 16.0% 143,648 51.2%

Jun 18 1,272,786 304,144 23.9% 256,352 118.6%

Jun 19 586,348 61,580 10.5% 170,000 36.2%

Jun 20 1,650,125 631,050 38.2% 500,000 126.2%

Jun 21 1,042,183 160,223 15.4% 657,316 24.4%

Jun 24 1,023,391 149,567 14.6% 405,684 36.9%Jun 25 903,145 275,927 30.6% 240,000 115.0%

Jun 26 547,345 128,071 23.4% 160,000 80.0%

Jun 27 661,315 118,122 17.9% 220,000 53.7%

Jun 28 2,380,102 480,339 20.2% 582,746 82.4%

Jul 1 1,313,567 454,863 34.6% 387,254 117.5%

Jul 2 1,446,141 466,232 32.2% 500,000 93.2%

Jul 3 1,237,856 460,556 37.2% 200,000 230.3%

Jul 4 1,379,944 403,840 29.3% 360,000 112.2%

Jul 5 1,386,629 444,685 32.1% 430,000 103.4%

Jul 8 1,207,318 266,019 22.0% 451,325 58.9%

Jul 9 1,577,061 466,107 29.6% 645,275 72.2%

Jul 10 1,308,447 290,886 22.2% 366,000 79.5%

Jul 11 1,052,577 110,535 10.5% 392,548 28.2%

Jul 12 916,240 70,137 7.7% 297,452 23.6%

Jul 15 599,902 116,752 19.5% 165,000 70.8%

Jul 16 563,226 26,944 4.8% 281,266 9.6%

Jul 17 625,747 17,192 2.7% 223,734 7.7%

8/12/2019 ASIC Complaint 5

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Day ASX Daily Volume Short Sales Shorts % M&G Sell Volumes Shorts cf M&G Sales

Jul 18 662,798 29,261 4.4% 280,000 10.5%

Jul 19 1,257,549 90,338 7.2% 600,000 15.1%

Jul 22 1,401,576 116,538 8.3% 1,045,717 11.1%

Jul 23 1,564,052 326,251 20.9% 484,283 67.4%

Jul 24 977,215 118,915 12.2% 277,979 42.8%

Jul 25 1,114,901 215,514 19.3% 322,021 66.9%

Jul 26 962,952 217,447 22.6% 310,000 70.1%

Jul 29 1,095,189 197,348 18.0% 324,662 60.8%

Jul 30 856,407 198,016 23.1% 235,338 84.1%Jul 31 962,904 235,078 24.4% 314,963 74.6%

Aug 1 645,414 159,832 24.8% 185,037 86.4%

Aug 2 806,125 117,102 14.5% 450,000 26.0%

Aug 5 800,068 210,020 26.3% 350,000 60.0%

Aug 6 649,314 180,387 27.8% 200,000 90.2%

Aug 13 2,556,847 421,741 16.5% 905,000 46.6%

Aug 14 2,303,642 278,817 12.1% 745,000 37.4%

Aug 15 1,624,503 393,402 24.2% 311,343 126.4%

Aug 16 1,844,313 251,956 13.7% 522,609 48.2%

Aug 19 1,428,396 162,618 11.4% 239,336 67.9%

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.

Average 19.7%