The corporate regulator has failed to prove Rex Airlines’ ex-chairman John Sharp and two directors knew the company was in financial distress in 2023 and hid the information from shareholders, a court has ruled.
The Australian Securities and Investments Commission (ASIC) had alleged directors including Sharp knew the failed airline was publishing an “unreasonable and unsupportable” profit forecast before reversing course and revealing a $35 million loss in 2023.
But on Tuesday, NSW Supreme Court Justice Ashley Black ruled that ASIC did not prove 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, told this masthead he was “grateful for the swift decision in this matter” .
Sharp also said he “pleased to be vindicated by the court”.
Rex Airlines has been found to have misled the sharemarket when it claimed it would deliver a strong financial result in 2023 months before it posted a $31.7 million loss, Judge Black ruled.
Rex later posted a major loss for the year, and was put into administration with $500 million in debts.
On February 28, 2023, Rex released a statement to the market saying it was optimistic the company would post positive operating profits for the financial year, barring any external shocks.
The statement was not corrected until June 20, when Rex forecast a $35 million loss, with 10 days of the financial year remaining.
Rex continues to fly today, focusing on regional routes, under a new owner, US-based AirT.
with AAP
Chris Zappone is a senior reporter covering aviation and business. He is former digital foreign editor.Connect via X, Facebook or email.From our partners
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