Former Rex chairman moves to reclaim position from directors who voted him out

Rex’s former executive chairman is seeking revenge on the directors who ousted him from the role, calling a general meeting to vote on their removal.

The former executive chairman of Rex Airlines, Lim Kim Hai has signalled he wants his job back, amid moves to dump four of the directors who saw him out of the role last month.

In an extraordinary development, Mr Lim who remains on the board and holds a stake of more than 5 per cent in Rex, has called a general meeting of shareholders to vote on a series of resolutions.

These include the removal of replacement non-executive chairman John Sharp, and fellow directors Ron Bartsch, Lee Thian Soo and James Davis.

In their place, Mr Lim wants Australian businessmen Lim Kang Song and Mukul Soul appointed as directors.

Additionally he is seeking that anyone appointed as a director by the board before the general meeting be removed.

It’s understood Mr Lim’s demands did not come as a surprise to those on the board, after an increasingly tumultuous period for Rex.

Currently the subject of an Australian Securities and Investments Commission inquiry, Rex’s directors were understood to have lost patience with Mr Lim’s approach to corporate governance, when the decision was made to remove him as executive chairman.

The ASIC inquiry was believed to relate to Rex’s delay in informing the market about a looming $35m operational loss in the 2023 financial year.

Former executive chairman of Rex Lim Kim Hai.

Despite Rex becoming aware of the result on June 13, the ASX was not told until a week later.

In a letter to the ASX, Rex claimed the information was not immediately shared with the exchange as required by continuous disclosure laws, because it was being “reviewed and confirmed” by the chairman, Mr Lim.

As a result of the matter, ASIC has interviewed all Rex directors, and examined computer records.

The ASX sought a further explanation from Rex this year, about why the relationship between Mr Lim and his brother-in-law Thian Song Tjoa was not disclosed during the acquisition of FIFO operator National Jet Express.

Mr Lim and Mr Tjoa each held considerable stakes in NJE of 30 per cent and 20 per cent respectively.

Mr Lim’s latest move comes at a difficult time for Rex, which is struggling to survive in the highly competitive domestic aviation market.

Despite maintaining a high level of reliability and receiving positive customer feedback, Rex continues to lose money on Boeing 737 services to major city markets, as competitors Virgin Australia and Jetstar undercut the smaller carrier on fares.

A case in point, was the recent launch of Melbourne-Perth flights at $99 one way, which were beaten within an hour of going on sale by Virgin.

Protests about the behaviour of other airlines to the Australian Competition and Consumer Commission have failed to amount to anything with Rex now in danger of going the same way as Bonza.

The airline’s share price is now close to the pandemic low of 54c, sitting just below 60c a share after briefly climbing to $2.07 in late 2020 when the expansion into domestic jet services was announced.