Corporate Travel Management will be removed from the
Australian Securities Exchange 200 Index, as announced by S&P Dow Jones
Indices in its latest quarterly rebalance, effective Dec. 22.
The Brisbane-headquartered travel management company is one of six publicly listed
companies that will be dropped from the ASX 200 Index this month. The index
measures the performance of the 200 largest ASX-listed companies by market
capitalization and is considered the benchmark for the Australian stock market.
The announcement follows CTM's
disclosure that its UK branch had overcharged clients, with auditors
finding £77.6 million in accounting irregularities dating back to 2023. The UK
and Australian governments—both of which are CTM clients—have since launched
separate investigations into the company’s accounts.
CTM shares have been suspended since August as
part of the ongoing accounting review by KPMG.
According to reports
in the Australian Financial Review, several fund managers have already
“slashed” the value of their shares in CTM.
“It’s inevitable that a stock would be removed from an index
if it is suspended for a lengthy period, or if there is serious doubt regarding
the company’s integrity or viability,” said Tony O’Connor, managing director at
travel procurement consultancy Butler Caroye, and a former stockbroker.
“The index deletion doesn’t worsen the actual situation
much; CTM’s eventual fate will be determined by all the facts and the full size
of their liability. But it will cause a drop in investor sentiment, if that can
get any lower,” O’Connor added.
CTM declined to comment on its removal from the ASX 200.