Troubled local airline company Rex has actually been charged of deceptive and deceitful conduct by the business regulatory authority.
The Australian Securities and Investments Commission is taking the service provider to the NSW Supreme Court, after more affirming Rex refuted its continual disclosure responsibilities.
The compensation is going after previous exec chair Lim Kim Hai over the disclosure violation, declaring Mr Lim and board participants John Sharp, Lincoln Pan and Siddharth Khotkar refuted their supervisors’ responsibilities.
“Our case will allege serious governance failures at Rex,” compensation chair John Longo claimed in a declaration on Wednesday.
“Rex’s directors had a responsibility to take reasonable steps to ensure the company complied with the law and we will seek to hold them to account.
“We will certainly declare 4 of Rex’s supervisors breached their responsibilities since they stopped working to take actions to guarantee the marketplace had exact info concerning the firm’s economic efficiency.”
The regulator is seeking declarations, pecuniary penalties and disqualification orders against Mr Lim, Mr Sharp, Mr Pan and Mr Khotkar.
Rex entered voluntary administration in July, with its businesses around $500 million in debt across the five groups in the organisation.
Nominally a regional carrier, the airline made an aggressive push to compete on key capital-city routes against industry heavyweights Qantas and Virgin in 2021.
It has struggled financially since, reporting a bottom-line net loss of $3.2 million for the first half of the 2023/24 financial year.
Its expansion included competing on Sydney-to-Melbourne flights, one of the busiest routes in the world.
The consumer watchdog found average fares on city routes went up 13 per cent in the two months after Rex stopped those services.
Ernst & Young Australia were appointed administrators but are yet to find a buyer and at least 600 workers have been made redundant.
Rex was given a $80 million loan facility from the federal government to keep the vital regional carrier operating.
The airline scrapped all capital city flights when it entered administration but has continued servicing regional routes.
Formed in 2002, Rex is Australia’s biggest independent local airline company and makes concerning 1050 trips a week on 45 courses.
