Corporate Travel Management chairman Ewen Crouch apologised on Friday for the impact of the trading halt on shareholders.
“We also extend our sincere apologies to the affected clients in the UK,” he said.
“While further investigation is required, including a comprehensive review of our UK operations and our overall governance framework, we remain fully committed to taking the necessary action to restore confidence.
An anti-immigration protest in August outside the New Bridge Hotel in Newcastle upon Tyne, which was used to house asylum seekers.Credit: Getty Images
“A process is now under way to consider all necessary remediation for the clients impacted in the UK.”
Crouch did not name the customers, but the Home Office has become a key client in the UK because of the surge in refugee claims in recent years.
Official figures showed a 27 per cent increase in the number of “irregular arrivals” to 49,000 in the year to June. The government said 43,000 of these came by boat.
The frustration of the Home Office became clear on the weekend in a statement to The Financial Times that confirmed an “urgent investigation” into the contracts because of the concerns about an “appalling” overspend.
“All taxpayer money owed will be recovered,” the Home Office told The Financial Times.
A representative of Corporate Travel Management in the UK declined to comment.
Corporate Travel Management told the Australian Securities Exchange on Friday it expected to reverse revenue worth £58.2 million by restating its results for 2023 and 2024, while also reversing another £19.4 million in the 2025 financial year. The combined total is £77.6 million.
Loading
The company said this would involve “refunds due to customers” as well as the “contractual uncertainty” when revenue could not be recognised in the accounts.
UK Home Secretary Shabana Mahmood has vowed to stop using asylum hotels by the end of this parliament, after years of disputes and protests at the way hotels and motels were turned into emergency housing.
“I will close every single asylum hotel,” she said last week. There were about 32,000 asylum seekers in hotel accommodation in June, down from a peak of 56,000 two years ago. The government plans to move many of them to military bases.
Corporate Travel Management said last year it was responsible for work such as finding and allocating hotel and vessel accommodation, transport and meals. It subcontracted some services, such as food supply.
It estimated the contract value with the Home Office at $3 billion in “total transaction value” over two years but noted that this was based on the gross sales and that its revenue would be a small proportion of the overall contract value.
“Currently, the accommodation spend under the contract is significantly lower than $1.5 billion per annum,” it said last year.
The company’s website says it does not participate in mandatory detention and the asylum seekers have freedom of movement.
Get a note directly from our foreign correspondents on what’s making headlines around the world. Sign up for our weekly What in the World newsletter.