It is hard to imagine how Tricom could fill the hole that would have been left in its capital by the failure of Opes Prime.

It seems that in order to raise liquidity Tricom had deposited about $70 million worth of shares with Opes (while Opes was still alive) in return for $30 million of ANZ’s or Merrill Lynch’s cash.

In effect, Tricom seems to have pawned the shares.

It got the cash, and then the Opes receivers, or rather its lenders ANZ and Merrill Lynch, got the shares. Tricom tried to get them back via off-market crossings on Friday, but failed because Opes was broke and locked up tight, so the trades could not settle. Yesterday those sales were cancelled.

The Australian Financial Review reports this morning that the Friday trades were subsequently completed by Tricom approaching ANZ and Merrill Lynch to buy them directly. The price is not disclosed nor any further details.

If it simply paid back the $30 million cash and got back the entire collateral, there would be no hole in Tricom’s capital.

But that seems unlikely. Even if Tricom had the cash, ANZ and/or Merrill Lynch would have had to accept a discount of 60% ($30m for $70m worth of shares) when they would be legally entitled to simply sell the stock into the market and keep the proceeds.

There were 12 trades on Friday totalling $41.2 million cancelled yesterday. They were off-market transactions and Tricom was on both sides, so the broker can cancel them with no consequences about failure to settle.

But the fact that Tricom was able to “pawn” the shares in that way is a fascinating insight into a murky corner of the sharemarket.

In the world of margin lending, what’s yours is mine. As Opes clients are now discovering to their distress, when you take out a margin loan using the Australian Master Securities Lending Agreement, rather than a normal margin loan mortgage contract, full title over the entire holding passes to the broker which then pools them as its own assets.

The AMSLA agreement has been used by Tricom, Opes and a number of other margin lenders because of the way it allows pooling and gives the broker and its lenders greater security and flexibility.

Meanwhile ANZ will continue its “orderly sale” of the Opes collateral today as it prepares to return to the Federal Court tomorrow to continue the hearing into the application for an injunction to stop it doing so.

Very weird. Merrill Lynch has already unloaded its $500 million worth of collateral and ANZ would be entitled to unload the entire $400 million remaining in its portfolio today, just in case it loses in court tomorrow. But a spokesman assured us last night that it would not do that.

The four clients seeking the injunction are actually not exactly clients of Opes itself, but of an Opes associate registered in the British Virgin Islands.

So the plot thickens further. Opes’s most famous client, Sydney lawyer Chris Murphy, rang us yesterday to declare that he had nothing to do with the British Virgin Islands and had never even been there, but what these others were doing dealing with Laurie Emini in this Caribbean paradise can only be guessed at.

The whole situation – books cooked to hide margin calls, brokers registered in the Caribbean, shares pawned, crossings made and then un-made, and unfortunate investors suddenly losing everything through no fault of their own – beggars belief entirely.

It is an absolute circus, and is beginning to look like some sort of commission of inquiry into the operation of the Australian securities markets will be needed to address it.