Corporate Travel Management Ltd (ASX: CTD) shares only returned to the ASX last Thursday, and the week couldn't have gone much worse.
After more than a year suspended from trading, the stock crashed 86% on its first day back to close at $2.32. The selling continued on Friday, with Corporate Travel shares dropping another 3% to finish the week at $2.25.
The shares are rebounding slightly today, up 4% to $2.35 at the time of writing. Even with that recovery, they remain around 85% below the $16.07 level they were trading at before the suspension.
And investors now have another problem to think about.
Image source: Getty Images
Another legal headache
According to The Australian, law firm Phi Finney McDonald is investigating a potential class action against Corporate Travel Management and its former auditor, PwC Australia.
The law firm said it was "well advanced in its investigation" into what it described as financial misreporting over several years.
Any class action would allege that Corporate Travel misled investors through its annual financial reports over a multi-year period up to 2024, in breach of the Corporations Act.
It would also allege PwC engaged in misleading or deceptive conduct and made false statements about its auditing of the company's financial reports.
Phi Finney McDonald principal lawyer Roop Sandhu told The Australian that investors were "rightfully concerned about what has happened to their investments".
At this stage, no class action has been filed, but it is another issue shareholders could probably have done without.
Some signs of progress
Corporate Travel shares were suspended in August 2025 after accounting problems emerged around customer charge rates in its UK operations.
Since then, the company has been working through a large customer remediation program. Around 78% of refunds have been agreed or are close to finalisation, leaving roughly $55 million still to be dealt with.
The FY26 result did at least show the underlying business is moving in the right direction.
Revenue and other income rose 4% to $669.9 million, while underlying EBITDA increased 36% to $113.6 million. Corporate Travel also returned to profit, reporting net profit after tax (NPAT) of $17.7 million compared with a $348.5 million loss a year earlier.
Transaction volumes climbed 13% to 18.3 million, while the company secured $669 million of new business and $1.5 billion of re-tenders and renewals during the year.
Would I buy Corporate Travel shares?
I can see why some investors might look at the $2.35 share price and wonder whether most of the bad news is already priced in.
The business is still operating, earnings improved in FY26, and the shares have already taken a huge hit.
But I'd still be staying on the sidelines.
There's a sizeable remediation bill to work through, the accounts carry a modified audit opinion, and there is now another potential legal issue hanging over the company.
After everything that has happened over the past year, I'd want to see a few of these issues resolved before considering the shares.
