Rex contravened its continuous disclosure obligations and misled the market, the NSW Supreme Court found on Tuesday.<\/p>\n
Rex Airlines was sued by corporate watchdog ASIC over allegations the airline misled the market about its financial position and engaged in “misleading and deceptive conduct” and contraventions of continuous disclosure obligations.<\/p>\n
ASIC also went after the company’s former directors. But the court did not find that three former Rex directors, John Sharp AM, Lincoln Pan and Siddharth Khotkar, breached their directors duties.<\/p>\n
Former executive chair, Lim Kim Hai had previously admitted to all alleged contraventions against him and accepted he should face a pecuniary penalty and disqualification orders for his conduct.<\/p>\n
The court found that Rex failed to meet its disclosure obligations by not sharing market-sensitive information that forecast a $35 million profit downgrade in June 2023 in a timely manner.<\/p>\n
The regulator had argued that Rex told the Australian Securities Exchange in February 2023 that the company would have “positive operating profits” for the 2023 financial year, but “did not have a reasonable basis for that claim”, given it had been incurring operating losses.<\/p>\n
It argued the company knew it would not deliver a profit in the 2023 financial year in February, but failed to tell the market until June, and thereby the company breached continuous disclosure obligations.<\/p>\n
The matter will return to court in the future to determine penalties against Mr Lim and declarations against Rex.<\/p>\n
Administrators were appointed to Rex in July 2024, when the airline collapsed with more than $500 million of debt.<\/p>\n
It was sold to US company Air T in December last year after the federal government stepped in to prevent it being permanently grounded.<\/p>\n
The Australian government has paid Rex Airlines’ debts to regional councils across the country to the tune of $4.8 million.<\/p>\n
On the court outcome, ASIC chair Sarah Court said “continuous disclosure is a core obligation for listed entities and underpins Australia’s corporate governance framework”.\u00a0<\/p>\n
“It is critical that investors have access to accurate and timely information that would impact their investment decisions,” she said.<\/p>\n
Rex Airlines has been contacted for comment. \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"Rex contravened its continuous disclosure obligations and misled the market, the NSW Supreme Court found on Tuesday. Rex…\n","protected":false},"author":2,"featured_media":231650,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[5799,64,63,99,61575,366000,366001,366003,85241,7356,98890,366004,366002],"class_list":["post-769633","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-asic","tag-au","tag-australia","tag-business","tag-court-case","tag-john-sharp","tag-lim-kim-hai","tag-misleading-and-deceptive","tag-nsw-supreme-court","tag-rex","tag-rex-airlines","tag-rex-directors","tag-sid-khotkar"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/769633","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=769633"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/769633\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/231650"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=769633"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=769633"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=769633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}