Corporate Travel Management Ltd (ASX: CTD) shares have delivered one of the ASX's most eye-catching returns — for all the wrong reasons.
The stock only returned to the ASX last Thursday after more than a year suspended from trading. Investors wasted little time selling, sending Corporate Travel shares crashing 86% on their first day back to close at $2.32.
After briefly stabilising, the selling resumed on Wednesday. The shares fell another 9% to $2.03 during afternoon trading.
And shareholders have another headache to contend with.
Image source: Getty Images
Potential class action adds to investor concerns
Law firm Phi Finney McDonald is investigating a potential class action against Corporate Travel Management and its former auditor, PwC Australia.
According to the law firm's website, the investigation concerns alleged financial misreporting over several years. The potential class action would allege Corporate Travel misled investors in its annual financial reports between 2020 and 2024, potentially contravening its continuous disclosure obligations under the Corporations Act.
PwC Australia is also alleged to have engaged in misleading or deceptive conduct and made false statements regarding its auditing of Corporate Travel's financial reports in accordance with applicable standards.
The proposed action would allege that this conduct caused Corporate Travel shares to trade at an inflated price, resulting in losses for investors who bought shares during the relevant period.
Roop Sandhu, Principal Lawyer at Phi Finney McDonald, notes:
Investors have a right to expect that financial statements from their listed investments are a true and fair reflection of the company's performance. They are rightfully concerned about their investments in Corporate Travel due to its long term suspension. Likewise, investors have a right to assume that an auditor's standards meet the relevant legislation and regulatory requirements.
No class action has been filed at this stage. Nevertheless, it's 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 significant customer remediation program. Corporate Travel has agreed or is close to finalising around 78% of refunds, leaving roughly $55 million still to resolve.
There are, however, some encouraging signs in the underlying business.
Corporate Travel's FY26 result showed revenue and other income increasing 4% to $669.9 million. Underlying EBITDA jumped 36% to $113.6 million.
The company also returned to profitability, reporting net profit after tax (NPAT) of $17.7 million, compared with a $348.5 million loss a year earlier.
Foolish takeaway
Corporate Travel's underlying business appears to be making progress. However, investors are being asked to look beyond an extraordinary amount of uncertainty.
The remediation program still has work to do, while the potential class action adds another layer of risk. Most importantly, the return of Corporate Travel shares to trading has demonstrated just how quickly investor confidence can evaporate when a company's financial reporting comes under scrutiny.
For prospective investors, the question may not simply be whether Corporate Travel shares look cheap after their spectacular collapse. It's whether the market has enough information yet to confidently say the worst is over.
