Allegations of inappropriate behaviour against WiseTech Global Ltd. CEO Richard White have triggered a sharp decline in the company’s stock, wiping $3.4 billion off its market value.
The claims, involving a settlement payment to a former partner in 2020, have prompted a review by the company’s board.
WiseTech shares dropped as much as 18% in Sydney trading, also cutting $1.4 billion from White’s personal fortune. The scandal has raised investor concerns about the company’s governance and its handling of the situation.
According to the Bloomberg Billionaires Index. White, 70, remains WiseTech’s largest shareholder and has led the company since its inception 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, claim White made a substantial payment to a former sexual partner in 2020 to settle accusations of inappropriate behaviour.
White has denied the claims in a statutory declaration presented to a board subcommittee. The media outlets clarified that they are not asserting the truth of the allegations but are reporting their existence.
In a statement released on Monday, WiseTech’s board confirmed it is taking the matter seriously: “The board is currently reviewing the full range of matters raised in today’s media reports and is actively seeking further information and taking external advice. It is conscious of the potential impacts on the company and will carefully evaluate all relevant factors in its assessment.”
What to know
The reports on Monday also suggested that White had previously paid A$2.7 million to a former female executive in 2019, a sum reportedly twice his CEO salary, without disclosing this arrangement to investors.
Leaked communications from WiseTech directors allegedly revealed concerns over the company’s governance related to White’s handling of this payment.
The unfolding scandal has put WiseTech’s corporate governance under intense scrutiny for the first time. White, a dominant shareholder in the company, has been instrumental in its rise to become a key provider of global logistics and shipping 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.
Only two current WiseTech directors were on the board when the original allegations were made, according to reports. A series of crisis meetings were held over the weekend to address the issue and to chart a response.
“These allegations are a major concern for investors,” said Ed John, executive manager of stewardship at the Australian Council of Superannuation Investors, which represents some of Australia’s largest pension funds. “It is critical that the board investigates these issues on behalf of all WiseTech shareholders and responds appropriately.”
As the board continues its review, the company faces mounting pressure to demonstrate strong governance and protect its standing in the market.
WiseTech’s future performance will likely hinge on how swiftly and transparently it handles the allegations against its CEO, as the scandal unfolds under the watchful eye of investors and stakeholders alike.
