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National firm launches investigation into ASX-listed travel giant

A national law firm will investigate the circumstances surrounding a share price dive that occurred at  travel management company listed on the ASX.

user iconEmma Musgrave 06 November 2018 Big Law
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Maurice Blackburn will conduct its investigation into Corporate Travel Management, after the company saw a 27 per cent price drop last week.

The firm’s investigation will look into whether another organisation, identified as hedge fund VGI Partners, may also be responsible for shareholders suffering the loss of value, according to a statement.

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Coincidentally, the investigation into Corporate Travel Management comes after VGI Partners released a 176-page report citing 20 “red flag” allegations against Corporate Travel Management. According to Maurice Blackburn, the contents of the report, and the motivations behind the report, are of “particular interest”, especially in circumstances where “VGI has taken a short position in [Corporate Travel Management], estimated to be worth about $55 million”.

“If upon further investigation it becomes clear to us that the red flag issues outlined in the VGI report were not properly disclosed to investors earlier and should have been, then a class action becomes more likely,” said Maurice Blackburn principal lawyer Rebecca Gilsenan.

“If in fact our investigation reveals that the VGI report was misleading and contributed to the share price fall, then we may be looking to pursue a case outside the parameters of a traditional action.

“VGI and CTD each accuse each other of misrepresenting the true position at CTD. Either way, clearly something drastic has occurred here which has taken shareholders and the market by surprise, and an investigation into what has caused those shareholder losses is a prudent first step we will take before committing to a class action.

“If there has been some form of corporate misconduct that has led to this significant price drop, then a class action is a sensible and efficient market-based enforcement mechanism to pursue accountability and redress for those affected.”

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