Regional Express Holdings (Rex) has been fined $A66,000 by the corporate regulator after deputy chairman John Sharp revealed its expansion plans to a newspaper before the market was informed.
The Australian Securities and Investment Commission found there were reasonable grounds to believe the airline was in breach of its continuous disclosure obligations from May 11 to May 12, 2020.
The company paid a penalty of $66,000 after ASIC issued an infringement notice alleging it had not complied with its continuous disclosure obligations.
Those obligations mean publicly traded companies are required to disclose information that may have a positive or negative impact on the company.
The problem stemmed from an interview with the Australian Financial Review on May 11 which revealed details of plans to start domestic operations in addition to regional flights.
ASIC said airline officials had discussed prior to the interview what could be discussed with the paper about the proposal.
“Following the release of the article on 12 May 2020, ASX contacted REX about the article and Rex was placed in a trading halt,’’ the commission said.
“Later that day, Rex disclosed to ASX that it was considering the feasibility of commencing domestic operations.
“Listed entities are required to immediately disclose material information in certain circumstances.
“This includes when that information loses confidentiality, for example when a journalist becomes aware of it.
“Continuous disclosure of information protects the integrity of the market by ensuring investors are provided with equal and timely access to information about an entity.”
Rex confirmed that it had paid the fine but said it had met continuous disclosure obligations.
“Be that as it may, Rex has elected to comply with the infringement notice and pay the penalty on a no admissions basis, as provided under the (Corporations) Act,” the company said in an ASX statement authorized by executive chairman Lim Kim Hai.
ASIC also noted that it had restricted the company from issuing a reduced-content prospectus and using exemptions for reduced disclosure until mid-December.