Corporate Travel Management’s long-running accounting scandal has taken a fresh turn, with an independent review alleging fake documents were presented to the company’s board and the potential refund bill jumping to £118 million ($222 million) – up from the £80 million reported in February.
KPMG’s findings, released Wednesday, are the most detailed account yet of alleged misconduct in the company’s UK arm, which has had its ASX shares suspended since August last year.
At the centre of the allegations is a UK government contract from 2021, under which Corporate Travel arranged nearly 1.4 million room nights across more than 60 hotels. By late 2022, the company had reportedly identified a £54.6 million gap between what it paid hotels and what it charged the client.
Senior UK executive Michael Healy allegedly presented the board with signed agreements to refund up to £28 million through future services. KPMG’s review found those documents may not have been authentic, and the UK government client has since reportedly confirmed it has no record of them.
Further investigation allegedly uncovered a broader pattern of misconduct attributed to Healy, including failure to return refunds, retaining customer overpayments, overcharging beyond contractual entitlements, and the purported amendment of contractual materials and audit evidence. Authorities have reportedly been notified.
Chairman Ewen Crouch told investors the findings were “difficult and confronting”. Corporate Travel has so far repaid £12 million and holds $115.7 million in cash, with analysts at RBC Capital Markets flagging that a shareholder capital raise “would not be out of the question”.
Founder Jamie Pherous, who stepped down as chief executive in February and has not been accused of wrongdoing, was replaced by chief commercial officer Ana Pedersen.
