Scandal allegations against billionaire CEO wipe WiseTech’s $3.4 billion valuation

Allegations of misconduct against the CEO of WiseTech Global Ltd. Richard White caused the company’s shares to plummet, wiping out $3.4 billion from its market value.

Claims related to the payment of compensation to a former partner in 2020 prompted a review by the company’s board.

WiseTech shares fell 18% in Sydney trading, also reducing White’s personal wealth by $1.4 billion. The scandal has raised investor concerns about the company’s management and how it is handling the situation.

According to the Bloomberg Billionaires Index. White, 70, remains WiseTech’s largest shareholder and has led the company since its founding in 1994, building it into a global leader in supply chain software through a series of acquisitions.

The allegations, first reported by Nine Entertainment Co. publications including The Australian Financial Review, The Sydney Morning Herald and The Age, allege White made a substantial payment to a former sexual partner in 2020 to settle allegations of misconduct.

White denied the claims in a formal statement submitted to the board subcommittee. The media clarified that they do not assert the truth of the accusations, but report their existence.

In a statement released on Monday, WiseTech’s board confirmed it was taking the matter seriously: “The board is currently considering the full range of issues raised in today’s media reports and is actively seeking further information and taking external advice. He understands the potential impact on the company and will carefully evaluate all relevant factors.”

What you need to know

Reports on Monday also said White previously paid A$2.7 million to a former female executive in 2019, reportedly double his CEO salary, without disclosing the arrangement to investors.

Leaked communications from WiseTech directors allegedly revealed concerns about the company’s governance surrounding White’s handling of the payment.

The unfolding scandal brought WiseTech’s corporate governance under scrutiny for the first time. White, the company’s dominant shareholder, has been instrumental in its growth into a key provider of global logistics and delivery software, serving major clients such as DHL, Sinotrans, Nippon Express and APL Logistics.

However, the current allegations and the company’s handling of them pose significant risks to its reputation and future growth.

According to reports, at the time of the initial allegations, only two current WiseTech directors served on the board. A series of crisis meetings were held over the weekend to address the issue and determine responses.

“These allegations are of significant concern to investors,” said Ed John, executive manager of governance at the Australian Council of Superannuation Investors, which represents some of Australia’s largest superannuation funds. “It is critical that the board of directors investigates these issues on behalf of all WiseTech shareholders and responds accordingly.”

As the board continues its review, the company faces growing pressure to demonstrate strong governance and protect its market position.

WiseTech’s future success will likely depend on how quickly and transparently it handles the allegations against its CEO as the scandal unfolds under the scrutiny of investors and stakeholders alike.

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