Corporate watchdog launches investigation into billionaire Richard White’s share trading

The corporate regulator’s inquiries into WiseTech Global founder Richard White’s share trading and the software giant’s market disclosures have progressed from a preliminary stage to a formal investigation.

The billionaire was forced to resign as chief executive and from the board of the logistics platform company in October after a joint investigation by The Sydney Morning Herald, The Age and The Australian Financial Review revealed a $2 million settlement with a former lover, and allegations of bullying and intimidation by a former director.

Richard White founded WiseTech Global and turned it into a major logistics software business.Credit: Bloomberg

The revelations prompted the WiseTech board to commission a review to examine the allegations of inappropriate conduct made by women against White. Preliminary findings of the review cleared White in November.

However, this masthead reported in February that two women – one an employee and the other a contractor – had complained to the company about his conduct. The final report, authored by Seyfarth Shaw and Herbert Smith Freehills and only partially released last month, found White misled the company over his relationship with employees.

A spokeswoman for White has previously said the billionaire businessman had only seen a copy of the findings the company provided to the ASX, and not the full report.

Despite claiming to have not seen the full report, White threatened to sue the company’s then-independent directors – chairman Richard Dammery, Fiona Pak-Poy, Michael Malone and Lisa Brock – over the findings, which he regarded as defamatory. He also accused them of leaking to the media.

The impasse over the release of the report, along with White’s continuing role at WiseTech, led to the dramatic resignation of the four independent directors in February. The billionaire, who controls 36 per cent of WiseTech’s share register, manoeuvred a return to the company as executive chairman in February, two days after the board exodus.

On Wednesday, WiseTech announced that the 70-year-old would become the company’s chief innovation officer later this year, when it appoints a permanent chief executive. He will continue to report directly to the board in the new job and be paid the same $1 million annual salary.

“My return to employment at WiseTech as executive chair and chief innovation officer reflects my long-term commitment to continuing WiseTech’s track record of delivering strong shareholder returns,” he said.

Sale of shares examined

Citing legal privilege, WiseTech has refused to provide the report to the Australian Securities and Investments Commission, which is also investigating the consistency of public announcements that the company has made about the review of White’s conduct, according to several people briefed on the matter but not permitted to speak publicly.

ASIC has also been investigating whether White possibly engaged in insider trading, a potential criminal offence, by selling shares during a blackout period between December 31 until February 26 when WiseTech released its financial results. During blackout periods, key personnel are prohibited from buying or selling company shares before earnings releases.

He offloaded about 1.87 million shares between December 24 and February 19. The average price over that period was $122, meaning White probably raised $229 million from the sale.

White said he had obtained legal advice before he made the trades.

He had sold the shares when he was not on the WiseTech board or an executive, returning as executive chairman on February 26.

ASIC is looking at the trades and is investigating what information White had during this period, including what meetings he attended and what, if any, financial information was shared with him even though he was working as a consultant to WiseTech at the time.

According to WiseTech’s corporate guidelines, directors and senior managers “must not deal in company securities during blackout periods”. The policy also says the company secretary can advise other people who “possess inside information” that the restriction applies to them too.

The Financial Review is not suggesting White is guilty of insider trading, only that the regulator is examining his trading. ASIC is also investigating whether WiseTech complied with continuous disclosure obligations.

The regulator has completed initial examinations of current and former WiseTech directors. ASIC and White declined to comment. WiseTech said it would “co-operate fully with any inquiries from ASIC”.

WiseTech shares last traded at $85.64, up 0.9 per cent on Wednesday. They have slumped about 30 per cent since the start of the year, with major investors including AustralianSuper, the country’s largest retirement fund, selling out of the company, citing poor governance.

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