WiseTech CEO settles bankruptcy case with former lover as scandal wipes billions from company

SYDNEY – Richard White, the Australian billionaire fighting accusations of inappropriate behavior toward women, has reached a legal settlement with an alleged former lover he pursued over bankruptcy.

The case was settled on October 18 and a cease and desist notice was filed in the Federal Court of Australia late on October 21, the court’s website shows.

Mr White, the CEO of WiseTech Global, had tried to bankrupt welfare entrepreneur Linda Rogan, with whom he was said to have 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 Mr. White expected her to have sex with him in exchange for an investment in her business.

Over the past three weeks, the flood of revelations from the trial has gripped Sydney’s business elite. The matter was also left largely unanswered – in public – by WiseTech’s board of directors.

That changed on Oct. 21 when WiseTech’s board said it was investigating “the full range of matters” raised in new media reports about individual cases involving Mr. White’s alleged past inappropriate behavior. The company’s shares fell 15 percent, removing almost US$5 billion ($6.6 billion) from its valuation.

Mr. White, 70, who amassed a personal fortune of $8.3 billion thanks to the growth of WiseTech, lost $1.4 billion of his wealth, 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.

AC/DC

Mr White grew up in Bexley, a middle-class Sydney suburb, and dreamed of becoming a rock star. He eventually left school to pursue his 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 (S$876,000) 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.

Mr. 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.” BLOOMBERG