Corporate Regulator Takes Rex to Court: What Are the Shocking Allegations?
The Australian Securities and Investments Commission is suing Rex and its directors for serious breaches, claiming misleading conduct and governance failures.
Rex, Australia, Corporate Regulator, NSW Supreme Court, Lim Kim Hai, Qantas, Virgin
Melbourne: So, Rex, the regional airline, is in hot water. The corporate regulator is accusing them of misleading conduct. It’s a big deal, and they’re taking it to the NSW Supreme Court.
The Australian Securities and Investments Commission (ASIC) claims Rex didn’t follow the rules about keeping investors informed. They’re also going after some of the airline’s top directors, including former chair Lim Kim Hai.
ASIC says these directors didn’t do their jobs properly. They should have made sure the company was following the law and keeping the market updated on its financial health.
According to ASIC, there were serious governance issues at Rex. They’re looking for penalties and even disqualification for the directors involved.
Rex has had a rough time lately. They went into voluntary administration back in July, with debts around $500 million. They tried to compete with big players like Qantas and Virgin but ended up losing money.
In fact, they reported a net loss of $3.2 million for the first half of the 2023/24 financial year. They even had to stop their city flights, which led to a rise in average fares on those routes.
Ernst & Young is now trying to find a buyer for Rex, but it’s tough. They’ve already let go of at least 600 workers. The government did step in with an $80 million loan to help keep things running.
Despite all this, Rex is still flying regional routes and is known as Australia’s largest independent regional airline, operating about 1,050 flights a week.