Corporate Travel Management dumped from ASX200 amid audit crisis
Corporate Travel Management has been booted from the ASX200 after months into trading halt over audit irregularities that saw customers overcharged $162 million.
It seems to go from bad to worse for the under siege Corporate Travel Management which has now been dumped from the ASX200.
The once ASX high-flyer is one of six companies that will be officially removed from the Index just before Christmas, in a move that traditionally impacts on the market perception of a business and increases the potential for passive investment withdrawals.
But there isn’t anything traditional about Brisbane-based CTM which has been in a trading halt since August 22 when its shares were at $16.07 after audit irregularities were found going back years.
KPMG is sorting out the mess which has so far revealed massive issues in its UK operations with customers overcharged some $162m and the trading halt is expected to continue into 2026.
Founder and managing director Jamie Pherous has issued an “unreserved apology” and at this stage the future of the company – which was valued at $2.35bn when the trading halt started – is in limbo.
The UK and Australian governments have also asked for a please explain and we hear that lawyers are gearing up for a class action.
As one market watcher told City Beat: “There’s no question that there will be a class action – these happen as night follows day these days. It’s just a question of timing ”
There’s no doubt that shareholders will be continuing their white knuckle ride for some time but also spare a thought for the index funds that ride the ups and downs of the ASX200.
Those in the know say that about 20 million CTM shares are held by passive funds or index funds, such as Vanguard, State Street and Blackrock, that now have to make changes as a consequence of the ASX’s rebalancing act.
We don’t yet know whether the big funds will be rushing to find a buyer for the stock off-market, or whether they will dump the stock on the market if it starts trading again one day.
If they do decide to move on immediately it will be interesting to see if there are any brave buyers waiting in the wings, and if so at what price?
One obvious source of buying demand could be the handful of short sellers bold enough to bet against Pherous and are now looking to lock in a profit.
We hear that Doug Tynan’s GCQ – which has been a big time critic of CTM’s accounting practices – has a cheeky bid in the market through Morgan Stanley at 1 cent per CTM share to close out his short.
Are there any index funds looking to get the paperwork on this sorry tale wrapped up before Christmas?
Party cruise
The holiday spirit was in full swing at Sarah McLeod’s annual Christmas Cruise, which recently set sail with a star-studded guest list.
The event thrown together by The Superjesus front woman and chair of Australian Women in Music drew a variety of funsters including Ross Balbuziente, the artistic director of the acclaimed Shake & Stir Theatre Co. Also in attendance was Annette Box, from St Margaret’s Anglican Girls School and rock music journalist Kara Jayne.
We hear that there was plenty of music, dancing and fun.
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Originally published as Corporate Travel Management dumped from ASX200 amid audit crisis
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