The ousted chairman of Rex - Regional Express (ZL, Wagga Wagga) wants the airline's entire board removed and has utilised the provisions of Australia's Corporations Act 2001 (Cth) to call a general meeting to put his proposals to the vote.

Singaporean businessman Lim Kim Hai stepped down as the longtime chairman of Regional Express Holdings in early June after questions were raised about his corporate governance practices. However, the publicly listed company informed the Australian Stock Exchange (ASX) on July 12 that it had received formal notice from Hai requesting the meeting. Hai is Rex's largest shareholder, with an almost 17% stake. Under local company law, a shareholder holding more than 5% of a company's issued stock can request a shareholders' meeting and put forward resolutions.

Hai wants to meeting to vote on the following proposals:

  • the removal of Lee Thian Soo as a director;
  • the removal of Ronald Bartsch as a director;
  • the removal of John Sharp as a director;
  • the removal of Jim Davies as a director;
  • the appointment of Lim Kang Song as a director;
  • the appointment of Mukul Soul as a director; and
  • that any person appointed as a director on or from July 5, 2024, until the end of the general meeting (other than Lim Kang Song and Mukul Soul) be removed.

The sole remaining director, Lincoln Pan, is PAG Asia Capital's board nominee. PAG has funded Rex to the tune of AUD150 million Australian dollars (USD101.8 million) in recent years, locking in Pan's board position. Rex used that money to start B737-800 operations on key Australian domestic routes. Although the jet fleet and network has slowly expanded, it has been losing money.

Under Hai's chairmanship, Rex had two recent run-ins with regulators. Last year, it took seven days to tell investors it would miss profit forecasts for fiscal 2023, contrary to continuous disclosure laws. In an explanatory letter to the ASX, Rex said the announcement was delayed because Hai was reviewing and confirming the data. However, the delay caused an ASX query and led to an Australian Securities and Investment Commission investigation.

A year earlier, when Rex acquired National Jet Express (JTE, Adelaide International), it paid 50% of the AUD48 million (USD32.5 million) asking price from its cash reserves. The remaining 50% was to come from Hai and parties associated with him. What was not disclosed at the time was the relationship between Hai and the associated party, Thian Song Tjoa, who turned out to be his brother-in-law. That 50% stake is split between Hai and Tjoa 30/20. The failure to declare this relationship also sparked an ASX query.

These incidents, along with Rex's flagging financial performance, struggling jet operations, and under-resourced turboprop operations, are believed to be behind the board's decision to remove Hai as chairman. He has not publicly stated whether he intends to resume that role.

Rex is yet to set a date for the shareholders meeting.