Corporate Travel Management (CTM) to reverse up to £118 million (A$222 million) in revenue after further audit findings.
CTM’s latest financial update has shown that account discrepancies in its UK business will require the company to pay back up to £118 million (A$222 million) in respect of FY2025 and prior years, significantly more than the £77.6 million (A$146.4 million) revealed in November last year.
The company may also need to pay back an extra £10 million (A$18.8 million) for H1 2026, subject to the outcome of commercial discussions with customers.
CTM confirmed the overcharging issues discovered are limited to its UK business, and no similar issues have been identified in any of its other regions.
In further developments, CTM said it became aware of a suggestion that some letter agreements with a customer may not be authentic, which contradicted the position understood and relied upon by the Board.
“The Former UK CEO was responsible for discussing the letter agreements with the customer, obtaining agreement to the content of the letters and having them signed,” CTM said.
“The Former UK CEO provided CTM with copies of the signed letter agreements”.
The company said there “was no independent corroboration that the letter agreements with the customer were in fact signed by the customer and the customer has subsequently informed CTM that it has no record of the letter agreements”.
As a result, CTM said “there was significant misjudgment” that resulted in an overstatement of revenue recognition in the FY23 and FY24 consolidated financial statements.
CTM terminated CEO for UK and Europe Michael Healy in December.
More details in today’s issue of Travel Daily.