WiseTech CEO scandal costs tech unicorn $6 billion

Richard White's personal dramas have impacted WiseTech's valuation. Photo: Supplied

Executives of logistics software giant WiseTech Global are working to head off an investor revolt after shareholders wiped 15 per cent from the company’s value after its board said it is reviewing allegations of inappropriate behaviour by founder and CEO Richard White.

White, who founded supply chain management software provider WiseTech Global in 1994 and took the company public in 2016 to strong financial success, served a $91,000 bankruptcy claim on wellness influencer Linda Rogan after their alleged relationship ended.

Rogan said she spent the funds to furnish a $13.1 million mansion that White had bought for her in the exclusive Sydney suburb of Vaucluse before his now ex-partner Zena Nasser found out about the relationship – prompting White to ask his lawyer to dump Rogan.

In a series of tit-for-tat filings that have put White’s personal life on public display, the Australian Financial Review reports that Rogan accused White of demanding sex for investment backing – behaviour that has allegedly been corroborated by other female entrepreneurs.

And while Rogan settled her legal dispute with White earlier today, White’s other behaviour – which allegedly includes lying about the reason he sold over 100 millions dollars’ worth of WiseTech shares in early October – has proved problematic for the tech giant.

White initially said that he had sold $61.38m worth of shares in early October – and a further $46 million a week later – as “on-market trades” because investors wanted more shares available for purchase.

However, subsequent investigations confirmed that he actually used the money for a settlement with Nasser – sending the company into crisis mode as investors slashed $6 billion from its value just weeks before its annual general meeting on 22 November.

An ASX filing reveals that WiseTech’s board is “currently reviewing the full range of matters” raised in recent media reports, and “is conscious of the potential impacts on the company” as White’s dirty laundry tarnishes the company’s public reputation.

White is one of Australia's richest people, and the 324th richest person in the world, according to Forbes, which noted the 16.06 per cent decline had reduced his personal wealth by $2.56 billion ($US1.7 billion) to $13 billion ($US8.7 billion).

One of Australia’s biggest tech success stories, WiseTech Global doubled its revenues during the pandemic, benefitting from companies’ efforts to improve supply chain planning as the COVID-19 pandemic wreaked havoc with global supplies of semiconductors and other goods.

WiseTech claims to have added more than 5,600 product enhancements to its flagship CargoWise application in the past five years “while bringing meaningful continual improvement to the world’s supply chains.”

Revenue grew from $507.5 million in the year to June 2021, to $1.041 billion in the year ending this June.

Revelations about the board’s inquiries drove a dramatic sell-off of company shares, which were trading at around $132 before free-falling to current levels around $102.

Yet as the board continues its investigation into White’s conduct, corporate governance expert Helen Bird called the board’s “underwhelming” move a “textbook crisis management manoeuvre – an attempt to buy time amid the storm” and recommended that White resign.

The board “initially took a ‘nothing to see here’ stance,” Bird – a senior lecturer in law with Swinburne University of Technology’s School of Business, Law and Entrepreneurship – wrote in the AFR, “incorrectly framing the allegations as a personal matter for White” despite allegations that WiseTech financed some of White’s transgressions.

“There is real evidence that investors no longer tolerate workplace sexual harassment and bullying,” Bird said, noting similar financial hits at Nine Entertainment and Seven West, and advising WiseTech’s board overlook personal allegiances to do what’s right for the company.

White, who is known as a strong supporter of technology education and innovation, was inducted into the Pearcey Foundation’s Hall of Fame last year before revelations this year that WiseTech’s gender pay gap of 24 per cent is well above industry averages.

He previously told Information Age that the company, which reached unicorn status in 2017, had come into an industry “that was prepared to live with quite old and legacy systems [and] created a change in the way people perceive commercial advantage.”