Corporate Travel Management announced on Monday, in response
to weekend news reports in the Australian Financial Review, it has made
progress in establishing a repayment plan for the U.K.-based clients the TMC systematically
overcharged since 2022 by £128 million. The vast majority of those charges are
owed to the U.K. government.
Reports in AFR and other Australian news outlets noted
that the Australian Securities and Investments Commission would put a hard
deadline against CTM for relisting its shares on the Australian Securities
Exchange, which the ASX suspended in December. Relisting, however, requires CTM
to file its revised fiscal year 2025 financial reports that have been in
process with auditors since July 2025, when the company halted trading for its
shares and began asking regulators for reporting extensions due to financial "irregularities."
As the travel agency clarified on April 22, required refunds
to U.K. customers had ballooned from an originally estimated £78 million to £118
million, which is equivalent to more than A$220 million and about US$157
million. Another £10 million, the TMC said, might have to be reversed from 2026
charges. CTM on March 31, 2026, had A$115.7 million in cash and A$75 million in
undrawn debt, according to the agency. CTM can draw down A$40 million of the
debt at will, but access to amounts above that threshold must be approved by
the lenders.
The AFR report questioned whether CTM’s lenders will support
the agency’s repayment plans. The outlet reported it had obtained a confidential investor
presentation given by CTM on May 22 that indicated lenders would require
the agency’s board of directors to attest to the firm’s solvency before giving
access to higher fund amounts. It reported that board members had not, at that
point, agreed to make those attestations and cited anonymous sources who had
said CTM had Allens and EY standing by to act as legal and accounting liquidation
advisors should funds not come through.
CTM did not address those specifics in its public
announcement. Rather, the agency underscored that it had made progress with
impacted former clients regarding refund amounts and payment schedules.
"CTM is in the final stages of documenting and finalising
commercial agreements with key impacted customers in the U.K. in relation to
staged and orderly refund arrangements. These discussions are well advanced and
form part of CTM's broader process to resolve the UK matters in a fair and
complete manner," according to the agency.
The announcement played down difficulties with lenders,
calling ongoing discussions "productive." Even as the refund requirements have
expanded over the course of the firm’s “forensic” audits, it is likely the
agency has negotiated with its former clients for reduced paybacks and has
plans to extend the refund period over a considerable time period.
CTM has leaned on the concept that its ongoing business and its
claimed 97 percent client retention rate speaks to the overall health of its
business. The company has indicated future revenues will also support refunds
over time.
"We remain focused on bringing the legacy U.K. matters to a
fair resolution, completing our financial reporting and rebuilding trust with
our stakeholders," CEO Ana Pederson said in a statement. "We are progressing
this work with discipline and urgency while maintaining a focus on client
service, stability and the long-term position of CTM’s global business."
CTM fired U.K. and Europe CEO Michael Healy in December in
relation to the systematic overcharges; company founder and former managing
director Jamie Pherous departed the company in February under the weight of the
financial scandal. He remains for the next several months in an advisory role.
2025 Financial Reports & PwC Audit Team Under
Fire
In the meantime, the ASIC has opened an investigation into CTM's
previous financial reporting and including its auditors. In a Senate committee
hearing on Friday ASIC deputy chair Sarah Court said that the regulator would
not oblige additional extensions for CTMs financial reporting.
"From our perspective the financial year records are well
overdue so we are considering action we might take in relation to that," Court
said during the hearing. She noted that the regulator also would be looking
into CTM's prior reports to the share markets since last year.
ASIC will open an investigation into PwC in relation to its
potential mishandling of the CTM accounts. A former PwC employee who worked on the
team responsible for CTM financial audits has accused the accounting firm of
not following basic standards with CTM’s financials. PwC has hired a private law
firm to investigate that matter—a situation that could complicate the ASIC inquiries
as details may now be considered protected by attorney-client privilege.