ASX Travel Giant Corporate Travel Management Plunges 80% on Relisting
Synopsis
Corporate Travel Management shares plunge 80% on return to trading, following a suspension over an overcharging scandal worth up to $272 million.
Key Highlights
- Corporate Travel Management (CTD) down 80% to $3.23 after returning to the ASX.
- The company had not met the deadline for lodgement of its 2025 financial statements, which became mandatory when trading was suspended over a year ago.
- An audit found the company had overcharged clients in the United Kingdom, Australia and New Zealand by as much as $272 million.
- For the year to June 30, it recorded a net profit of $17.7m after posting a loss of $348.5m the previous financial year.
Trading Resumes; Stock Price Tumbles
After being pulled off the ASX for its long suspension, shares in Corporate Travel Management fell sharply on relisting. When trading resumed on Thursday, the stock plummeted 80% to $3.23.
Before its suspension for not lodging its 2025 financial statements, shares were last at $16.07 in August last year. ASX listing rules require companies to report earnings biannually, in February and August, two months after the finalisation of half-year results and full-year results.
Overcharging Scandal Behind the Delisting
Corporate Travel, which was delisted last year after a battle with auditors that refused to sign off its full-year accounts because it uncovered the firm had overcharged clients in the UK, Australia and New Zealand by as much as $272 million.
In 2022, a forensic audit by KPMG discovered that Corporate Travel had overcharged the British government over four years. All told, the company said it had overcharged the UK Government by £80 million (around $A150 million).
Leadership Changes Follow Scandal
Michael Healy, then head of UK operations at the firm, was fired in December after it was disclosed he had allegedly falsified documents connected with a plan to compensate clients impacted parties. Former chief executive Jaymie Pherous, who founded Corporate Travel and took it on to the ASX in 2010 also resigned as such last February but continued doing consultancy work for six months. Also amongst the top 10 shareholders is Pherous himself, with another 16.6 million shares in his name.
Company Reports Progress on Refunds
Corporate Travel Management chief executive and managing director Ana Pedersen responded to the scandal claiming improvement had been made in reimbursing customers caught up in the mess. About 78% of refunds had been either agreed or were close to being finalised, aided by a newly announced $175 million funding package, she said.
Corporate Travel, which upgraded its financial results on Wednesday, announced a net profit of $17.7 million for the year to June 30. This was after a loss of $348.5 million last year, mostly due to goodwill writedowns.
Source: Finance Yahoo
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