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

Allegations of inappropriate conduct against Richard White, CEO of WiseTech Global Ltd., have led to a sharp decline in the company’s shares, wiping $3.4 billion from its market value.

The claims, which relate to a settlement payment to an ex-partner in 2020, have prompted an investigation by the company’s board.

WiseTech shares fell as much as 18% in Sydney trading, also shaving $1.4 billion off White’s personal fortune. The scandal has raised concerns among investors about the company’s management and its handling of the situation.

This is evident from 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 significant payment to a former sexual partner in 2020 to settle allegations of inappropriate behavior arrange.

White denied the claims in a statutory declaration submitted to a subcommittee of the board. The media clarified that they are not claiming the truth of the allegations, but 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 and seeking further information external advice. She is aware of the potential consequences for the business and will carefully assess all relevant factors in her assessment.”

What you need to know

Monday’s reports also revealed that White had previously paid $2.7 million to a former top female executive in 2019, an amount reportedly twice the CEO’s salary, without disclosing the arrangement to investors.

Leaked communications from WiseTech directors are said to have raised concerns about the company’s management regarding White’s handling of this payment.

The unfolding scandal has placed 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 major provider of global logistics and shipping software, serving major customers 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, there were only two current WiseTech directors on the board when the original allegations were made. A series of crisis meetings were held this weekend to discuss the issue and map out a response.

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

As the board continues its investigation, the company faces increasing pressure to demonstrate strong governance and protect its position in the market.

WiseTech’s future performance will likely depend on how quickly and transparently it deals with the allegations against its CEO, as the scandal unfolds under the watchful eyes of investors and stakeholders alike.

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