The Australian Securities and Investments Commission (ASIC) alleges former executive Chair Lim Kim Hai was involved in a disclosure breach, and that he and three other directors contravened their duties.
ASIC has commenced legal proceedings in the Supreme Court of NSW seeking leave to allege Regional Express Holdings Limited (Rex) engaged in misleading and deceptive conduct and contraventions of continuous disclosure obligations.
ASIC accuses Rex released a misleading ASX announcement on 28 February 2023, which stated Rex was “optimistic” about having a positive operating profit for the full FY23 – barring any further external shocks.
Rex did not have a reasonable basis for the claim for a number of reasons, ASIC alleges, including because it had incurred operating losses in the financial year to date, and it did not prepare a forecast for FY23 before the announcement.
ASIC also claims four of Rex’s directors, including John Sharp, breached their duties because they failed to take steps to ensure the market had accurate information about the company’s financial performance.
ASIC will seek a declaration of contravention against Rex and not pecuniary penalties, however it will pursue pecuniary penalties and disqualification orders against directors Lim, Sharp, Lincoln Pan, and Siddharth Khotkar.
More details in today’s issue of Travel Daily.