Ex-lover’s scandal wipes $3 billion off tech mogul’s fortune

(Bloomberg) — Richard White, the Australian billionaire who is battling accusations of inappropriate behavior toward women, has said he has a relaxed relationship with risks.

“It may be a personality trait, but I’m not afraid of risk or uncertainty,” the CEO of WiseTech Global Ltd. said. in a podcast last year. “If you have a risk, you can make something of it.”

Now the self-made tech mogul is facing what is likely his biggest risk since founding his shipping software company in 1994. Over the past three weeks, the flurry of revelations from a court case involving an alleged former lover has gripped Sydney’s business elite. The matter was also left largely unanswered – in public – by WiseTech’s board of directors.

That changed Monday when WiseTech’s board said it is investigating “the full range of issues” raised in new media reports about individual cases involving White’s alleged historically inappropriate behavior. The company’s shares fell 15%.

That has wiped $2.9 billion off his fortune, which peaked at $11.1 billion three weeks ago, according to the Bloomberg Billionaires Index.

“A founder and CEO of a major Australian company is a public figure, a front and a central factor in the company’s name, brand and success,” says Helen Bird, senior lecturer at Swinburne Law School in Melbourne. “When the share price falls as a result of one of these types of news stories, it suggests that the company’s reputation has been damaged.”

The Australian Council of Superannuation Investors, which represents some of the country’s largest superannuation funds, said the matter was of “major concern” to investors and called on WiseTech’s board to investigate and respond appropriately.

White’s woes were put in the spotlight by his attempt to bankrupt a welfare entrepreneur, with whom he allegedly had a sexual relationship, according to the Australian Financial Review. Earlier this month she filed an application for bankruptcy annulment. In an affidavit, she alleged that White expected her to have sex with him in exchange for an investment in her business. The case is before the Australian Federal Court.

The scandal entered a new phase on Monday, when the Australian Financial Review, the Sydney Morning Herald and the Age – citing sources they did not identify – reported that White had paid millions of dollars to a former sexual partner to settle allegations from late 2020 arrange. The newspapers said White provided a board subcommittee with a statutory declaration denying the claims.

WiseTech spokeswoman Catherine Strong referred all questions for White to Helen Karlis, a representative of his lawyers. Karlis did not respond to emails requesting a response from White.

White has sold US$368 million ($245 million) worth of WiseTech shares since August 23.

Growing up in Bexley, a middle-class Sydney suburb, White dreamed of becoming a rock star, eventually leaving school to pursue the ambition. Things quickly soured.

“I played in a band for a number of years but I realized it was a really tough industry to work in,” he told the Australian Investors Podcast. “You got a lot of fame and attention, but you didn’t get any money.”

He then started repairing guitars and became so skilled that he even repaired AC/DC’s Angus Young’s guitars.

“It was very profitable,” he said on the podcast. “But I realized it was a service business that I couldn’t scale.”

In 1994, he and Maree Isaacs founded WiseTech, a major provider of software that coordinates logistics and shipping around the world. Twenty-two years later the company was valued at A$1 billion when it listed on the Australian Securities Exchange.

The following year it was included in the S&P/ASX 200 and today it employs 3,300 people in 37 countries. It claims its customers include the majority of the world’s largest global logistics providers and freight forwarders, including DHL, China’s Sinotrans, Japan’s Nippon Express and APL Logistics.

In a country with a number of high-profile billionaires – White is currently 10th on Australia’s rich list with a fortune of $8.2 billion, down two places from Friday – he is one of the most colorful. In 2014, the tech founder bought his family home in Bexley – which previously served as an events center for a company run by his grandparents – and turned it into a complex with numerous homes. His mother lives in one of them.

But while his private life was sometimes lavish, his company WiseTech performed solidly and grew into a global supply chain powerhouse through a series of acquisitions.

White is WiseTech’s largest shareholder, which makes the current situation facing the board particularly challenging.

“The recent reports have undoubtedly cast a shadow on the company’s reputation,” said Megan Motto, CEO of the Governance Institute of Australia. “Markets are very sensitive to such news, especially when it concerns the personal behavior of a high-profile founder.”

–With help from Amy Bainbridge and Angus Whitley.

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