Updated ,first published
The corporate regulator has failed to prove Rex Airlines’ ex-deputy chairman John Sharp and two directors knew the company was in financial distress in 2023 and hid the information from shareholders.
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”.
He said he was “pleased to be vindicated by the court”.
In Tuesday’s ruling, Black found that Rex Airlines itself misled the sharemarket when it claimed it would deliver a strong financial result in 2023 months before it posted a $31.7 million loss.
Rex later posted a major loss for the year, and was put into administration with $500 million in debts.
Executive chairman Lim Kim Hai had also earlier admitted to similar allegations against him and accepted he should face a penalty.
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.
ASIC, the corporate watchdog, noted that the court found Rex had breached continuous disclosure obligations over its 28 February 2023 profit forecast.
ASIC chair Sarah Court said was “critical that investors have access to accurate and timely information that would impact their investment decisions”.
Justice Black gave his verdict but did not deliver his reasons on Tuesday. A penalty hearing will be held at a later date.
ASIC had sought penalties and disqualification orders against the former directors.
Rex fell into administration in 2024 with about $500 million in debt. Its collapse weakened competition for air travel to the major capitals, where the company had expanded in a move that brought it into direct competition with larger rivals Qantas, Jetstar and Virgin Australia.
Rex was later bought by US aviation group Air T via administrators EY in October 2025. It continues to fly regional routes.
With AAP
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Chris Zappone is a senior reporter covering aviation and business. He is former digital foreign editor.Connect via X, Facebook or email.
