The full impact of the suspension of Corporate Travel Management’s CEO for CTM UK and Europe, Michael Healy, is yet to be felt locally, after a financial review revealed the business had overcharged customers around AU$162 million.
Healey will continue to receive full pay “in accordance with his employment contract” while he is on suspension. In the interim, CRM global chief operating officer Eleanor Noonan will take over as interim CEO for CTM UK and Europe.
“Given the further investigation and review by the Board, CTM will not make any further comment at this time,” the announcement said. “CTM will provide further details to the market once this investigation is completed.”
The announcement of Healey’s suspension has coincided with an update from CTM in relation to the delay in the release of its financial statements.
A forensic review of the UK groups financial statements conducted by KPMG revealed CTM had overstated revenues by about £80 million ($162 million) that would now have to be refunded to its European customers.
CTM Chairman Ewen Crouch AM said “We recognise how serious this situation is and the concerns it has caused. We deeply regret and sincerely apologise for the impact of the trading suspension on our shareholders.
“We also extend our sincere apologies to the affected clients in the UK. While further investigation is required, including a comprehensive review of our UK operations and our overall governance framework, we remain fully committed to taking the necessary action to restore confidence. A process is now underway to consider all necessary remediation for the clients impacted in the UK.”
How did they get here?
In August, CTM claimed that its new auditor Deloitte had identified issues relating to the timing of revenue and costs recognition over multiple years. It was expected that “the nature of any restatement would be to increase prior year(s) earnings and reduce current year’s earnings (FY25)”. The announcement assured shareholders that “any restatement is expected to be non-cash in nature”, but that the release of its full-year financial results would be delayed.
As a result of the review required of past financial years, CTM requested a voluntary suspension be implemented for its ordinary shares on ASX, “until a definitive position on the restated accounts and its FY25 accounts are released”. CTM advised it was aiming to release its FY25 accounts by 25 September 2025.
However on 17 September, CTM announced a further delay in the release of its full-year financial results. “The matter remains unresolved,” it said.
“Despite progress being made, it has become clear that the significant amount of work being undertaken by KPMG and management and the subsequent audit work required cannot be completed in time to finalise the financial report by 25 September 2025, as previously targeted. CTM expects to be in a position to provide a further update in November 2025.”
The announcement again assured the market that any potential adjustments were not expected to have a cash impact.
What’s next?
The timing for the release of the FY25 financial statements has been further pushed back, with an update now expected to be provided on 19 December.
“CTM has obtained relief from ASIC to extend the statutory deadline to lodge its FY25 financial statements until 31 December 2025,” the latest announcement said. “CTM does not expect to be able to meet this timeline and is engaging with ASIC in relation to this.”
Crouch said: “We remain committed to working collaboratively with our auditors to finalise the FY25 financial statements and will provide a further update as soon as it is possible.”
The mandatory suspension of the company from trading on the ASX will remain in place.
