In a surprise twist, former Rex executive chair Lim Kim Hai admitted the accusations levelled at him by the corporate watchdog in the NSW Supreme Court on Wednesday.
The Australian Securities and Investments Commission brought the case against Mr Lim and three other Rex directors, alleging they failed to amend a February 2023 statement citing profit optimism until just weeks before the end of the 2022/23 financial year, which resulted in a $31.7 million loss.
Mr Lim, former deputy chair John Sharp and directors Lincoln Pan and Siddharth Khotkar had collectively planned to contest the charges until Mr Lim made the admission during the morning court session.
"ASIC and Mr Lim will ask the court to impose pecuniary penalties and disqualification orders, as well as other orders, against Mr Lim," the corporate watchdog said in a statement.
"The penalties and orders are subject to the court's consideration and approval."
Rex released a market statement on February 28, 2023, claiming it was optimistic the company would post positive operating profits for the financial year, barring external shocks.
Despite incurring multiple operating losses in the months before, the statement was not amended until June 20, 10 days before the end of the financial year.
Rex adjusted its guidance to a $35 million loss before ultimately posting a $31.7 million pre-tax operational loss for the year.
On Monday, the commission's legal team described the initial profit claims as unreasonable, since Rex had less than five months to turn around months of operating losses, in a seasonally weak half for the domestic flight industry.
A separate breach of the airline's disclosure obligations, relating to the expansion from regional services into domestic operations, led to a $66,000 fine in 2021.
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 carrier's reported malfeasance has raised questions about the Albanese government extending it an $80 million lifeline and buying up $50 of its debt to keep regional routes running.
The matter against the remaining former board members is ongoing.
