Corporate Travel Management (CTM), founded in 1994, is a global travel management company providing solutions to corporate clients. The company aims to deliver savings, efficiency, and safety to businesses. Corporate Travel, an ASX-listed company, is currently embroiled in a significant accounting scandal, casting doubt on its future and trapping shareholders as trading remains suspended. A draft report by KPMG revealed material overstatements of revenue in its European books, leading to a required repayment of approximately $162 million to customers.
The problems stem from the timing of revenue bookings, initially detected by new auditor Deloitte after the company switched from PwC. Britain’s Cabinet Office is now investigating potential overcharging related to contracts, including a substantial agreement with the Home Office to house asylum seekers. The Australian Finance Department and the Victorian government have also requested independent audits of Corporate Travel’s contracts to ensure taxpayers were not overcharged.
The scandal has triggered a crisis of confidence, with shareholders unable to trade the suspended stock. The controversy has drawn attention to past criticisms, including concerns raised by short-sellers regarding the company’s acquisition-driven growth and profit margins. Executive departures, including that of Laura Ruffles, have added to investor unease, raising questions about governance and financial practices within the company.
