Corporate Travel Management chief executive Jamie Pherous.  Picture: Claudia Baxter
Corporate Travel Management chief executive Jamie Pherous. Picture: Claudia Baxter

CTM ambush took months of planning

AT least two months of hard work went into the well-co-ordinated ambush of the $3 billion Corporate Travel Management empire at the weekend.

Embargoed material sent to multiple media outlets ensured that VGI Partners' withering assault on the soundness of the high-flying Brisbane company achieved maximum impact yesterday.

But, we have been assured, the timing had nothing to do with CTM's annual general meeting, which plays out on Wednesday and has suddenly become a far more intriguing event. Yeah right!

VGI has shorted more than two million CTM shares so it obviously has a vested interest in seeing the stock price head south.

Yet, even without that incentive, the Sydney investment management firm has managed to raise quite a few eyebrows.


Jamie Pherous illustration by Brett Lethbridge.
Jamie Pherous illustration by Brett Lethbridge.


VGI alleges that CTM suffers from a raft of sustainability and transparency problems.

It claims quite a few financial and operational issues paint "a troubling picture'' of CTM and wonders whether investors "have been seduced by eight years of a rising share price''.

All eyes are now on CTM founder and boss Jamie Pherous, who did not return a call seeking comment on Monday as his firm went in to a trading halt to prepare a response to the blistering critique.

Pherous, who launched the firm in 1994 and is now worth more than $560 million, has grown used to living large.

Just four months ago the globetrotting skiing enthusiast settled on the $11.3 million purchase of a riverfront block of dirt in New Farm where he hopes to build a mansion.


Analysts who have followed CTM's stratospheric ascent since listing in 2010 told City Beat yesterday they don't see any clear parallels with Brisbane-based Blue Sky Alternative Investments.

US short sellers targeted Blue Sky earlier this year, alleging it exaggerated asset values, misrepresented performance and charged excessive fees.

As the company mounted a half-baked defence, its share price collapsed and has shown no sign of recovering.

But even brokers who believe CTM is on a much sounder footing told your diarist yesterday they see some troubling issues, such as the company's revised revenue recognition policy.

VGI also dispatched researchers across Europe, where they discovered that five of CTM's 12 supposed offices don't exist and another one appears to be a "ghost'' outlet that remains largely unused.

Investigators also fanned out across North America, where they learned that four of 17 offices were either vacant or extremely small.

One of the spots they visited was the remote Alaskan outpost of Dutch Harbour, where CTM's website shows it has an office.

Instead, the VGI team found a Safeway supermarket at the address. Alerted that CTM had an office at the airport, they came across a small space by the baggage claim area occupied by a single employee.


On a lighter note, we were amused to learn yesterday that a bloke named Andrew Bills has just taken the helm as the new boss of CS Energy.

Yes, you read that correctly. You just can't make up an ironic last name like, particularly in a sector feeling the backlash of consumer anger over rising prices.

With more than 20 years in the energy and infrastructure game, Bills comes to the job after a stint as a top gun at Origin Energy, where he headed the LPG arm of the business across nine countries.

During his time there, Bills slashed operating costs in the energy markets business by more than $100 million. He also previously worked at now-defunct Babcock & Brown and Stanwell Corporation.

Bills replaces Martin Moore, who left CS Energy in August after five years in the top job.

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