Corporate Travel Management (CTM) will be removed from the Australian Securities Exchange (ASX) 200 Index, as announced by S&P Dow Jones Indices in its latest quarterly rebalance, effective 22 December.
The Brisbane-headquartered travel management company is one of six publicly listed companies that will be dropped from the ASX 200 Index this month. The index measures the performance of the 200 largest ASX-listed companies by market capitalisation and is considered the benchmark for the Australian stock market.
The announcement follows CTM's disclosure that its UK branch had overcharged clients, with auditors finding £77.6 million in accounting irregularities dating back to 2023. The UK and Australian governments – both of which are CTM clients – have since launched separate investigations into the company’s accounts.
CTM shares have been suspended since August as part of the ongoing accounting review by KPMG. According to reports in the Australian Financial Review, several fund managers have already “slashed” the value of their shares in CTM.
“It’s inevitable that a stock would be removed from an index if it is suspended for a lengthy period, or if there is serious doubt regarding the company’s integrity or viability,” said Tony O’Connor, managing director at travel procurement consultancy Butler Caroye, and a former stockbroker.
“The index deletion doesn’t worsen the actual situation much; CTM’s eventual fate will be determined by all the facts and the full size of their liability. But it will cause a drop in investor sentiment, if that can get any lower,” O’Connor added.
CTM declined to comment on its removal from the ASX 200.