ASIC seeks appeal over Rex directors ruling in NSW disclosure case

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ASIC appeal over Rex directors

Highlights

ASIC is seeking leave to appeal the Supreme Court of NSW's June 2026 ruling that former Rex non-executive directors did not breach their duties over a February 2023 profit forecast.
The Supreme Court found on 30 June 2026 that Rex breached continuous disclosure obligations from 14 April 2023 but did not engage in misleading conduct, and the court is yet to set a leave-to-appeal date.
On 20 October 2026, Lim Kim Hai was disqualified for four years and ordered to pay an $800,000 penalty after admitting to continuous disclosure and directors' duties breaches at Rex.

Appeal targets directors' duties findings

As reported by ASIC, the regulator is seeking leave to appeal the Supreme Court of NSW decision that former Rex non-executive directors John Sharp, Siddharth Khotkar and Lincoln Pan did not contravene their directors' duties in connection with a profit forecast issued on 28 February 2023.

ASIC began proceedings in December 2024 against Rex, the three non-executive directors and former chief executive officer and executive chairman Lim Kim Hai. In a ruling on 30 June 2026, the court found Rex breached its continuous disclosure obligations in relation to the forecast from 14 April 2023, but did not find the three directors had breached their duties and did not find Rex engaged in misleading conduct.

The regulator says it is appealing the part of the decision concerning the non-executive directors because it is concerned there were errors in the primary judge's findings. ASIC is not appealing the court's decision in relation to Rex, and the court is yet to set a date to determine the application for leave to appeal.

Timeline for Rex and broader implications

Rex was listed on the Australian Securities Exchange from November 2005 to September 2025, although its shares were suspended from trading when the airline entered voluntary administration on 30 July 2024. The company was bought by U.S.-based Air T in December 2025 and was subsequently renamed Regional Express Holdings Pty Ltd.

The matter remains significant for Australian listed companies because it centers on continuous disclosure compliance and the responsibilities of non-executive directors when profit forecasts are made to the market. In a related development, the Supreme Court of NSW on 20 October 2026 ordered Lim Kim Hai to be disqualified for four years and to pay an $800,000 pecuniary penalty after he admitted involvement in Rex's continuous disclosure breaches and in breaching his directors' duties.

In our earlier report on the Court of Appeal ruling on commission partners’ liability under Malaysia’s Partnership Act 1961, we covered how the court found a lawyer with commission-partner status could be treated as a partner and held liable for a firm-related debt. The decision overturned lower-court findings and highlighted broader implications for how responsibility and financial exposure may attach to partners in professional firms, regardless of whether they hold equity.

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