Police called in to Rex to investigate illegally recorded board meeting

Rex chairman John Sharp has been revealed as the one who called in federal police to investigate an ousted rival recording the final board meeting of the troubled airline.

The bitter dispute between Rex’s former chairman Lim Kim Hai and his successor John Sharp has now resulted in a complaint of criminal behaviour to the Australian Federal Police.

It’s understood Mr Sharp filed the complaint with the AFP last Monday August 12, after learning Mr Lim had offered a recording he made of the final Rex board meeting to a journalist.

Fellow directors on the Rex board were made aware of the recording at the July 30 meeting, which Mr Lim attended virtually from Singapore.

It was at the meeting that the board voted to appoint EY as voluntary administrators.

Mr Lim voted in favour of all the motions put at the meeting, but informed directors he had recorded it and was intending to use the recording in legal proceedings against them.

General counsel at the meeting warned Mr Lim the recording was illegal because it was made without the consent of those present.

There was no further action until Mr Sharp became aware Mr Lim was prepared to provide the recording to media.

The AFP confirmed the complaint had been received but would not comment further.

Executive Chairman of Regional Express (Rex) Airlines Mr Kim Hai Lim. Picture: Justin Brierty

The bitter fallout between Mr Lim and Mr Sharp was laid bare in early June when it emerged the Rex board had voted to dump Mr Lim as executive chairman, in favour of Mr Sharp.

A few weeks later Mr Lim sought to hold an extraordinary general meeting, to vote on resolutions to return him as executive chairman and oust Mr Sharp and three other directors.

The meeting has been put on hold until the administration of Rex is finalised.

Rex insiders have revealed how Mr Lim had become increasingly volatile in the last year, to the point where he was refusing to share cash flow forecasts with the board.

He did not tell other directors a consortium led by Rex co-founder Michael Jones had made a $160m offer to the buy the airline, and is alleged to have undermined negotiations with Virgin Australia to take over the financially troubled jet operations.

Documents lodged with the Australian Securities and Investments Commission showed the extent of Rex’s debts to employees, airports, catering companies, engineering firms and even a florist.

A sum of $10.5m was owed to Flight Centre, $7.3m to Sydney Airport and $6.3m to Melbourne Airport.

Qantas was owed close to $100,000; the Byron Bay Cookie Company was out of pocket by $44,500 and Rex had run up a debt of $2.7m with Airservices Australia.

Regional airports and local councils were also hard hit by Rex’s collapse, with Mt Isa Airport owed almost $160,000, Cairns almost $200,000 and Dubbo Regional Council over half a million dollars.

To date more than 600 employees had been axed along with Boeing 737 operations, and on Monday another 73 workers were facing retrenchment from call centres and other parts of the business.

A statement from EY said consultations had begun with an additional 261 employees in areas of the business with “a higher headcount than what was required for the operation of a regionally focussed airline”.

“Subject to the outcome of these consultations, approximately 73, under one third of those participating in consultations may be impacted,” said the statement.

“No changes have been made to the operations of the regional network, and the Rex Group has retained all employees who operate these regional services.”