Corporate Travel Management overcharges clients $162m, sparking demand for answers from Moomoo’s Michael McCarthy

Corporate Travel Management earlier this year revealed it had discovered faults with its accounts going back several years after changing auditors from PwC to Deloitte and has since been investigating its financial statements.

On Friday, CTM told shareholders it would be forced to reverse about $162m of revenue from its UK operations.

This includes £58.2m for the 2023 and 2024 financial years alongside another £19.4m from the 2025 financial year.

It also revealed that CTM’s chief executive for the UK and Europe Michael Healy has temporarily stood down “with immediate effect” and will be replaced on the interim by the company’s chief operating officer Eleanor Noona.

The revelation sparked concerns from Michael McCarthy, the CEO of trading app Moomoo, who called for more information about the company’s dilemma.

“This situation is just getting worse and worse and it appears (after) having told us that they won’t be looking back and affecting previous years,” Mr McCarthy told Business Now.

“We now find out that the years 2023, 2024 and 2025 will all be affected by this accounting error.

“The explanations from this company simply have not been full enough. We just don’t know what the real situation is.

“The standing down of the UK CEO is a clue but we’d really like to hear a lot more from CTM about exactly what is going on with the European operations.”

CTM appointed KPMG to conduct a review of its UK financial statements after the revelations about its accounts came to light.

The company’s decision to reverse the massive payment follows a review of “approximately 47,000 documents and data analysis of over 1.5 million sales and purchases transaction lines, representing aggregate transaction values exceeding £400 million”.

CTM was not able to publish its financial results for 2024-25 and its shares have been halted on the ASX.

The company’s stock price had lifted from $13.27 at the beginning of the year to $16.07 when it stopped trading in August, however, Mr McCarthy said its share price would take a hit once it went back onto the market.

“There (are) a couple of mechanical reasons for that along with shareholder anger and that is they’ve been removed from one of the FTSE indices and that means that the passive holders for indexed products around that will be selling at open for if and when it will resume,” he said.

“If it’s removed from the ASX 200 that would be a big move because that would mean a lot of index selling here in Australia as well and that sort of weight can really knock a stock around particularly when there’s bad news like this.”

CTM has not named any of the customers it has overcharged, but the company’s UK operations came under fire for winning a government contract to house asylum seekers on barges on the River Thames.

While the policy was reversed after UK Labour won the 2024 election, the account was quite lucrative for the company.

Mr McCarthy said the recent controversy surrounding this contract would only exacerbate the recent overcharging drama.

“There appears to be a number of problems emanating from the UK office in particular and given its move into some fairly controversial areas, such as housing refugees on barges in the (River) Thames, it does mean they’re quite vulnerable to news flow,” he said.

Alongside the UK reversals, CTM said it will also add an extra $13.9m expense to the 2025 financial year accounts for the ANZ region.

RBC Capital Markets’ Wei-Weng Chen said CTM’s accounts were “far worse” than expected and sounded the alarm over the magnitude of the company’s accounting error.

“Up to a third of European revenues from FY23-25 may need to be restated and possibly refunded which could lead to significant cash impacts,” Mr Chen said.

“ANZ (is) impacted too – CTM had previously said issues were isolated to Europe only.

“FY23-25 accounts appear to be all negatively impacted (while CTM) previously suggested prior years would see a benefit while FY25 would be impacted.”

CTM’s managing director Jamie Pherous apologised to the company’s impacted clients and stressed the team “recognise the impact this situation had had on our shareholders”.

“Our priority is to uphold the highest standards across our operations, work closely with our auditors to finalise the FY25 financial statements, and implement all necessary measures to strengthen the company,” Mr Pherous told shareholders.

“While this work continues, we remain firmly focused on delivering quality service to our clients across all markets.”