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

Allegations of inappropriate behavior against WiseTech Global Ltd. CEO Richard White have sent the company’s stock plummeting, wiping $3.4 billion off its market value.

The claims, which involve a settlement payment to a former partner in 2020, have prompted a review by the company’s board.

Shares in WiseTech 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 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 sex partner in 2020 to settle the allegations of inappropriate behavior.

White has denied the claims in a legal filing to a board subcommittee. The media clarified that they do not affirm the veracity of the allegations but that they report their existence.

In a statement released on Monday, WiseTech’s board confirmed that 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 aware of the potential impacts on the business and will carefully assess all relevant factors in its assessment.”

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Reports on Monday also suggested that White had previously paid A$2.7 million to a former female executive in 2019, a sum that is double her CEO salary, without disclosing that arrangement to investors.

Leaked communications from WiseTech directors allegedly revealed concerns about corporate governance related to White’s handling of that payment.

The unfolding scandal has brought WiseTech’s corporate governance under intense scrutiny for the first time. White, the company’s controlling shareholder, has been instrumental in its rise to become a key supplier 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 management, pose significant risks to its reputation and future growth.

Only two current WiseTech directors were reportedly on the board when the original allegations were made. A series of crisis meetings were held over the weekend to address the issue and map out a response.

“These allegations are a significant concern for investors,” said Ed John, executive manager of custody 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 review, the company faces increasing pressure to demonstrate strong governance and protect its market position.

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

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