A regional airline has been found to have misled the stock market when it claimed it would deliver a strong financial result months before it posted an eight-figure loss.
Justice Ashley Black on Tuesday ruled the Australian Securities and Investments Commission had proven the allegations against Rex and former executive chairman Lim Kim Hai.
But ASIC did not prove its case against three former non-executive directors - former chair John Sharp and directors Lincoln Pan and Siddharth Khotkar, he found.
Justice Black gave his verdict but did not deliver his reasons.
A penalty hearing will be held at a date to be fixed.
The finding against Lim is unsurprising given he admitted the allegations against him in May.
ASIC had alleged Rex's former directors misled the market through statements claiming the board confidence in a strong financial result, months before declaring a $31.7 million loss.
On February 28, 2023, the airline 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.
The corporate watchdog sought penalties and disqualification orders against the former directors.
Rex fell into administration in 2024 with about $500 million in debt and was later snapped up by US aviation group Air T via administrators EY in October 2025.
The federal government extended the carrier an $80 million lifeline in late 2024, and bought $50 million of its debt from a major creditor to keep regional routes running.
Rex is Australia's largest independent regional airline, flying to 53 destinations across the nation.
