Rex ex-chairman John Sharp, directors cleared of breaching duties
Updated ,first published
The corporate regulator failed to prove that Rex Airlines’ former vice chairman John Sharp and two executives knew the company was in financial trouble in 2023 and hid that information from shareholders.
The Australian Securities and Investments Commission (ASIC) claimed executives including Sharp knew the failed airline had published an “unreasonable and unsupportable” profit forecast before reversing course and announcing a $35 million loss in 2023.
But on Tuesday, NSW Supreme Court Justice Ashley Black ruled that ASIC had not proven its case against Sharp and former non-executive directors Siddharth Dilip Khotkar and Lincoln Lin Feng Pan.
Sharp, a former federal transport minister who once served in John Howard’s government, said he was “grateful for the swift decision on this matter”.
He expressed his “happiness to be acquitted by the court.”
In Tuesday’s ruling, Black found that Rex Airlines misled the share market by claiming it would deliver strong financial results in 2023 before announcing a $31.7 million loss.
Rex subsequently posted a large loss for the year and was placed into administration with debts of $500 million.
Chief executive Lim Kim Hai had also previously acknowledged similar allegations against him and agreed that he should be punished.
On February 28, 2023, Rex issued a statement to the market stating that he was optimistic that barring any external shocks, the company would post positive operating profits for the fiscal year.
The statement was not corrected until June 20, when Rex projected a $35 million loss with 10 days left in the fiscal year.
Corporate watchdog ASIC said the court found Rex had breached its continuing disclosure obligations in relation to its 28 February 2023 profit forecast.
ASIC chief executive Sarah Court said it was “critical that investors have access to accurate and timely information that will influence their investment decisions”.
Judge Black handed down his decision on Tuesday but did not give his reasons. A sentencing hearing will be held at a later date.
ASIC had sought penalty and disqualification orders against the former directors.
Rex fell into administration in 2024 with debts of around $500 million. The company’s collapse weakened competition for air travel to major capitals; The company has expanded in a move that puts it in direct competition with larger rivals Qantas, Jetstar and Virgin Australia.
Rex was later acquired by US aviation group Air T through EY executives in October 2025. It continues to fly regional routes.
from AAP
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