Former Rex boss admits misleading profit message
The former boss of regional airline Rex has admitted misleading investors by claiming the board was optimistic about making a profit months before the company announced millions of dollars in losses.
In a surprise move, former Rex chairman Lim Kim Hai pleaded guilty to charges brought against him by the corporate watchdog in the NSW Supreme Court on Wednesday.
The Australian Securities and Investments Commission brought proceedings against Mr Lim and three other Rex executives, alleging they failed to amend a February 2023 statement touting profit optimism until just weeks before the end of the 2022/23 financial year, resulting in a $31.7 million loss.
Mr Lim, former deputy chairman John Sharp and directors Lincoln Pan and Siddharth Khotkar had planned to collectively contest the charges until Mr Lim confessed at the morning court session.
“ASIC and Mr Lim will ask the court to impose fines and disqualification orders, as well as other orders, against Mr Lim,” the company watchdog said in a statement. he said.
“Sentences and orders are subject to the consideration and approval of the court.”
Rex published a market statement on February 28, 2023, claiming that it was optimistic that the company would post positive operating profit for the fiscal year barring external shocks.
Despite having incurred numerous operating losses in the previous months, the declaration was not amended until June 20, 10 days before the end of the fiscal year.
Rex adjusted its forecast to a $35 million loss before ultimately posting a pre-tax operating loss of $31.7 million for the year.
The commission’s legal team on Monday called Rex’s initial profit claims unreasonable because it had less than five months to recoup months of operating losses in a seasonally weak half of the domestic flight industry.
A separate breach of the airline’s disclosure obligations related to the expansion from regional services to domestic operations led to a $66,000 fine in 2021.
Rex went into administration in 2024 with around $500 million in debt and was later acquired by US aviation group Air T through administrators EY in October 2025.
The carrier’s reported misconduct raised questions that the Albanian government had handed it an $80 million lifeline, buying out $50 of its debt to keep regional routes running.
The case against the remaining former board members continues.
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