No. They do have an interest and would fall under section RG 222.57 of the Corporations Act, which in effect would treat the lender as the prime broker who would then be responsible to disclose the activities of his client and their associates.
I.e. Under the Corporations Act, entry into a prime broking agreement triggers the need for a prime broker to give a substantial holding notice if the client’s relevant interest in the securities, when combined with the prime broker’s other relevant interests (and the interests of any associates), is 5% or more of a listed entity. This is also the case when an existing prime broking client acquires new securities over which the prime broker has borrowing rights.
In theory and in this situation both the prime broker and lender could mess about with documentation for 5 days each before they lodged a joint or separate disclosure but they would risk being investigated and possibly fined. The onus would be on the parties to prove their intent was honourable, however usually someone slips up or something falls apart.
But given that we are almost 15 days past most volume selling, this would have come out by now if they pushed it to the extreme. It certainly was possible but less likely as time goes by. Your point about a lot of sellers stalking 17-20c etc is also valid. I think this is also to intimidate buyers and holders. Doesn't phase me though. I'm keeping my shares until 2015 and buying anything people want to dump.
KZL Price at posting:
15.5¢ Sentiment: Buy Disclosure: Held
