MoneyAuditor backs Corporate Travel Management against 'mischievous' shorts

12:10  08 november  2018
12:10  08 november  2018 Source:   watoday.com.au

Corporate Travel Management in trading halt as VGI steps up pressure

Corporate Travel Management in trading halt as VGI steps up pressure Corporate Travel Management shares have been placed in a two-day trading halt while the ASX-listed company prepares its response to a second report by the hedge fund targeting the stock.

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Auditor backs Corporate Travel Management against 'mischievous' shorts© Paul Rovere Its auditor's preliminary view is that the short seller's criticism is "superficial", CTM said. Corporate Travel Management says its auditor EY has dismissed claims raised by short-sellers that the ASX-listed travel group has overstated its financial position and faces potential asset write-downs.

CTM entered its second trading halt in as many weeks on Tuesday after hedge fund VGI stepped up its attack on the company. VGI is demanding more details on how CTM tested the level of goodwill on its balance sheet, and is rubbishing the company's attempts to dismiss VGI's claims that CTM was overvalued and had overstated its financial position and the scale of its global business.

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On Thursday morning, before its shares resumed trading, CTM said it had brought in the auditor to review the hedge fund's claims and that the auditor had "provided CTM with its preliminary observations with respect to certain issues raised by VGI and notes that VGI’s report is superficial".

CTM said that it hired EY because of its experience in the travel sector, with the firm acting as auditor to ASX-listed travel peer Flight Centre and other global travel agents.

"VGI may continue to make mischievous and misleading claims about issues that CTM believes have no consequence for the financial performance of the business and execution of CTM’s successful business model," CTM said in a statement.

"The board will continue to ensure shareholders are fully informed about the fundamental performance of the business and does not intend to have the business distracted by baseless and self-serving claims."

VGI has taken a short position worth about $50 million, and stands to benefit if CTM's share price falls further.

The stock slumped 27 per cent last week after VGI released its initial attack on CTM.

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