An Australian travel business has been forced into liquidation owing creditors about $2.7m after launching just four years ago.
Moomoo’s CEO Michael McCarthy has demanded answers after Corporate Travel Management revealed it has to repay $162m it overcharged clients while its UK boss has stood down.
“This situation is just receiveting worse and worse, and it appears (after) having notified us that they won’t be viewing back and affecting previous years,” Mr McCarthy notified Business Now.
“We now find out that the years 2023, 2024 and 2025 will all be affected by this accounting error.
“The explanations from this company simply have not been full enough. We just don’t know what the real situation is.
“The standing down of the UK CEO is a clue, but we’d really like to hear a lot more from CTM about exactly what is going on with the European operations.”
Metro 1 Travel and Technology, the parent company of Rail Online – an Australian platform applyd by travel agents and customers to book rail travel via operators in the US, Europe and Japan – went into administration in late November.
Matthew Byrnes and Andrew Hewitt from Grant Thornton Australia were appointed administrators at the time.
On Wednesday, Metro 1 Travel and Technology was put into liquidation after the operator of Eurail – which sells European rail services to Australia via Rail Online – demanded to be repaid money it was owed.
This also followed a failed $12m capital raise by Metro 1 Travel and Technology.
James Dunne, the sole director of the travel company, notified administrators that Metro 1 Travel and Technology planned on utilizing this cash to repay debts and fund growth.
Rail Online has collapsed owing creditors about $2.7m. Picture: Getty Images
This fell through, according to Mr Dunne, due to “external factors”.
Documents filed with the Australian Securities and Investments Commission reveal the company collapsed owing creditors about $2.7m.
This includes $879,000 to employees and $1.8m to unsecured creditors, The Daily Telegraph reported.
Customers’ bookings will remain valid for travel, according to a statement on the now-defunct Rail Online website.
Rail Online’s booking platform was not operational after administrators were appointed and tickets were not available for purchase via the platform.
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In the report, administrators stated the company was not able to repay major debts due to an inability to grow the business.
“As the company was not able to achieve revenue growth, it did not have the financial means to support its cost base, which was already relatively lean,” the administrators wrote.
“This resulted in the company accruing significant legacy debts in which it was ultimately unable to repay as and when they fell due.”
Metro 1 Travel and Technology may have been insolvent since June, the report warned, prompting further investigation from the administrators.
The administrators were also viewing to sell Rail Online and stated they had discussions with interested parties.
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