Updated ,first published
The founder of the embattled Corporate Travel Management (CTM), Jamie Pherous, is stepping down with immediate effect with the company’s shares remaining suspended after the group admitted overcharging clients, including the UK government, as much as $160 million.
CTM told the ASX on Monday morning that Pherous would retire as chief executive and board member, with chief commercial officer Ana Pedersen to act as chief executive of the travel agency while a permanent replacement is found. Pherous, also the group’s second-largest shareholder, will move to an “advisory role” under a six-month consulting agreement with the company.
Chairman Ewen Crouch said the board had determined now was the “appropriate time to accelerate the transition to a refreshed corporate structure”, while acknowledging the problems the company had faced.
Crouch acknowledged the need for change given the scale of the scandal, which will cost investors dearly, but avoided laying any blame at the feet of CTM’s charismatic founder, who started the business more than three decades ago.
“We recognise his impact, but as a board, must also focus on the evolution of the business,” Crouch said.
“Clearly, we have let shareholders down over recent months. We understand that, and we’ve heard first-hand their deep frustration. It’s important that we learn from these events and create a strong and sustainable structure that can help us restore trust in the business.”
Crouch would not give speculate on whether CTM would be in a position to release the 2025 financial year accounts before the current financial year ends on June 30.
“There is confidence that we will complete the process to enable the company to relist. I cannot give you a specific date,” Crouch said.
CTM shares have been suspended for months, after the company last year flagged minor accounting issues that then ballooned into massively overcharging the UK government for services including housing asylum seekers on large-scale barges including the controversial Bibby Stockholm.
The company had previously told the ASX that these asylum seeker contracts would be worth $3 billion over several years, but the controversy over asylum seekers in the UK, and a change of government, led to abrupt changes to the deal.
CTM’s woes have raised concerns it was charging too much to house the asylum seekers in hotels across the UK under contracts arranged by the former Conservative government. According to UK reports, CTM has won £3.9 billion ($7.7 billion) in public sector contracts over the past decade.
The company also holds the contract for managing Australian government travel until 2027. Finance Minister Katy Gallagher confirmed that CTM agreed to an independent audit of its business in the light of the overcharging claims.
Pedersen, CTM’s acting chief executive, said: “It’s been made public what the Australian government is intending on doing, and we’re working very closely with them, and that process will commence very shortly.”
That deal to manage Australian government travel has not been implicated in the overcharging scandal and there is no suggestion Pherous was involved in the broader issues.
CTM had a market valuation of $2.35 billion when shares last traded, but some analysts have halved their value of the stock and one investor has written off its valuation entirely.
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Colin Kruger is a senior business reporter for the Sydney Morning Herald and The Age.Connect via email.
