Short seller J Cap hits WiseTech with a billion-dollar smash at AGM

WiseTech founder and chief executive Richard White has hit back at the "self-serving, manipulative" short seller J Capital which lobbed another report attacking the global logistics group's financial reporting just minutes before its annual meeting.

“Let’s forget about WiseTech in this, think about what is actually going on here. This is manipulation of the market. You don’t drop incendiary reports like that in the middle of a trading day unless you are trying to damage the market for profit,” Mr White told reporters after the company's annual meeting in Sydney on Tuesday.

"You don’t drop incendiary reports like that in the middle of a trading day unless you are trying to damage the market for profit," said WiseTech chief executive Richard White. Credit: Peter Braig

The stock dropped more than 10 per cent to a low of $25.85 before recovering to close at $26.65.

The stock, which has been valued at more than 20 times its expected revenue for the current financial year, has lost $4 billion of market value since hitting a record high in September.

Mr White, chairman Andrew Harrison and auditor Chris Hollis defended the company's accounts as WiseTech's lofty valuation took a billion-dollar knock within hours of the attack.

Beijing-based J Capital accused WiseTech of $66 million of "fake costs" and queried the abrupt departures of director Christine Holman and the company's legal chief, Katharine Lowe.

“We’ve not had the opportunity to see those or study them," Mr Harrison told shareholders when asked during the meeting about the latest report from J Capital.

"If there have been additional allegations raised by them we will be addressing those as soon as we possibly can,” he said.

Mr Harrison categorically rejected the earlier J Capial allegations and said there were no other issues that would explain the continuing share price weakness since the attack.

“To the extent these events occur, the only thing you can do is robustly rebut any misleading information that is put out there, which hopefully we did on this occasion,” he said.

KPMG audit partner Mr Hollis told WiseTech investors the audit was "robust and comprehensive so I completely disagree with JCap’s statement".

J Capital claimed it had tried to approach WiseTech weeks ago about its concerns but had not received a response.

"As far as I’m aware we have not been approached, certainly not by someone claiming to be JCap,” Mr White said.

JCap also queried why WiseTech billed clients out of Australia which it described as "the world's most expensive tax jurisdiction" instead of following the example of Microsoft and Google which have controversially moved some of their operations to low-tax domiciles such as Ireland.

J Capital questioned whether WiseTech's local domicile was to "sustain the 'audit-light' structure it enjoys in Australia."

"I don’t see any reason why that would be a valid strategy," said Mr White. "And certainly from a legal point of view you can’t move taxes offshore.”

WiseTech also confirmed its guidance for the current financial year, subject to currency movements with revenue expected to be between $440 million and $460 million. Earnings before, interest, tax, depreciation and amortisation (EBITDA) is expected to be between $145 million and $153 million representing underlying earnings growth of up to 42 per cent.