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Former Rex boss Lim Kim Hai has been fined $800,000 and disqualified from managing corporations for four years.
Lim, who in May admitted to misleading investors over Rex’s financial performance in 2023 and agreed to accept penalties, has also been ordered to pay a portion of ASIC’s costs in the case brought against him and three other former Rex directors.
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“Directors play a critical role in upholding the integrity of our financial system by keeping public markets informed,” said ASIC chair Sarah Court.
“Continuous disclosure is a core obligation for listed entities and underpins Australia’s corporate governance framework. It is critical that investors have access to accurate and timely information that would impact their investment decisions.”
The case brought by ASIC against Lim, alongside his fellow former directors John Sharp, Siddharth Khotkar, and Lincoln Pan, concerns a market update in February 2023 saying Rex was “optimistic” about a full-year profit.
According to ASIC, Rex had seen operating losses in the year to date before issuing that statement and had not prepared a financial forecast for FY23 beforehand. The airline later forecast a $35 million loss for that financial year and ultimately posted a $31.7 million loss.
In a 2024 press release, ASIC said Rex “did not have a reasonable basis for that claim for a number of reasons, including because it had incurred operating losses in the financial year to date, and it did not prepare a financial forecast for FY23 before issuing the announcement”.
In his judgment, NSW Supreme Court Justice Ashley Black noted that while a higher penalty could have been imposed for Lim’s conduct, both Lim and ASIC had agreed that a four-year ban and $800,000 fine were appropriate.
“I bear in mind that the relevant contraventions were, as Mr Lim admits, serious; and that Mr Lim was a senior executive of Rex at the time they occurred. I bear in mind the matters noted above, any of which would support a greater rather than a lesser penalty,” he wrote.
“However, having regard to the agreement reached between the parties and the principles noted above, I accept that the proposed disqualification period of 4 years combined with a pecuniary penalty of $800,000 is within an appropriate range, and I will make the orders sought in that regard.”
Justice Black in June had ruled in favour of Sharp, Khotkar and Pan, saying ASIC had failed to prove its case against the three men despite Lim’s admission of wrongdoing.
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