Troubles for Australian travel management company Corporate
Travel Management deepened on Wednesday as the company disclosed overcharges
to UK customers, first estimated to be £77.6 million (about $105 million),
increased by more than 50 percent to £118 million ($160 million) following additional investigations into major accounting errors.
CTM released a statement on Wednesday to the Australian
Securities Exchange that its "forensic" accounting review by KPMG found
further irregularities going back to its 2019 financial year and "additional
impacted underlying customer contracts."
CTM now expects to "reverse revenue" of up to £118 million
to cover the years up to and including 2025, with a possible further revenue
reversal of £10 million during the first half of its 2026 financial year "depending on the outcome of ongoing commercial discussions with certain
customers."
The TMC continues to claim the accounting discrepancies only
affect its UK operations and similar issues were not identified in its other
markets. Impacted clients include the UK government, which launched its own investigation into its relationship with CTM
last year.
In its latest statement, CTM revealed that it had
overcharged one customer [named as the UK government in previous reports] by
£54.6 million as part of hotel contracts to source 1.4 million nights in 2021, during
the Covid pandemic. The TMC claimed the rapid demand challenged its "processes and controls
environment," and discrepancies were first identified in late 2022.
According to CTM’s statement, then-COO Michael Healy, who later
was appointed chief executive for the region, was responsible for obtaining
signed "letter agreements" with the UK government to resolve the overcharging
issue in 2023. But the TMC said it became "aware of a suggestion that the
letter agreements may not, in fact, be authentic" in November 2025.
The TMC dismissed Healy "for breach of contractual
obligations" in December 2025.
In addition to the original issues, KPMG’s investigation discovered
additional instances of UK clients being overcharged and having their funds
retained between July 2018 and June 2025, which led to the company overstating
its revenues. The TMC said it will cooperate fully with authorities in relation
to ongoing investigations.
CTM’s shares have been suspended on the ASX since August
2025, but the company said it hoped they will start trading again during Q2 of
2026. The company’s founder and managing director Jamie Pherous also stepped down earlier this year.
The TMC said it had so far refunded around £12.1 million to
impacted clients and that the amounts and timing of future repayments would be
subject to CTM "reaching commercial agreements" with customers.
"Since November 2025, CTM has engaged, and will continue to
engage, with representatives of key impacted UK customers. This dialogue has
been collaborative and co-operative and is well advanced," according to CTM's statement.
CTM chairman Ewen Crouch added in the statement: “The
ongoing trading suspension [from ASX] and its impact on shareholders is deeply
disappointing and a matter of serious concern for the board. We sincerely
apologize to our shareholders and to affected clients in the UK for the
circumstances that led to this situation.
"The length of the suspension reflects the board's
determination to fully investigate the issues identified in the UK and to
address them decisively and completely." Crouch added that "significant changes" have
been implemented within CTM's UK business.
CTM sought to reassure investors and clients by stating that
it had A$115.7 million ($82 million) in cash and another A$75 million ($54 million) in "undrawn debt as of 31 March.
The TMC added that it "continues regular and productive
engagement with key stakeholders" including airline association International
Air Transport Association and its banking partners.
CTM entered into "a financial security arrangement"
with IATA in December, which involved "the provision of security and
implementation" of shortened BSP (Billing and Settlement Plan) settlement
periods.
The TMC has delivered uninterrupted service throughout its
financial misconduct revelations in the UK market and ASX suspension.
"As I meet with customers and partners around the world, it
is clear that our offering remains strong, and we are committed to maintaining
their confidence through the substantive action we are taking," said acting
group CEO Ana Pedersen. "Working closely with the board and the executive team,
I am fully committed to resolving these matters as quickly and responsibly as
possible."