Four WiseTech directors depart over White’s new role
More than $9bn has been wiped from WiseTech’s value after four board directors dramatically quit due to ‘intractable differences’ in their views of founder Richard White. The tech group also cut its revenue outlook.
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A WiseTech board stoush that triggered the dramatic resignation of four directors who “determined it is in the best interests of the company to stand aside” has shaved $9.15bn off the company’s market capitalisation.
WiseTech told shareholders on Monday that non-executive directors Lisa Brock, Richard Dammery, Michael Malone and Fiona Pak-Poy would depart this week due to “intractable differences in the board” and “differing views around the ongoing role of the founder and founding CEO, Richard White”.
Investors punished the group, with WiseTech shares plunging 23 per cent to $92.62 in early trading on Monday after coming out of a trading halt, with Mr White’s near 36.7 per cent stake falling by $3.3bn.
In a statement, WiseTech confirmed that all four directors would depart on February 26 after the release of the company’s half-year results. Businessman Mike Gregg will begin as a director on the same day.
The departures arrive following two new allegations levelled against Mr White this month. WiseTech at the time told shareholders that the terms of Mr White’s new role, titled founder and founding chief executive, were still being agreed upon.
WiseTech also updated its guidance, with revenue now likely to be at the bottom end of $1.2bn to $1.3bn for the full year, due to further delays to the rollout of the three announced “breakthrough” products.
Underlying earnings are forecast to be around $600m-$660m, but the earnings margin rate is expected to be towards the top of the previously announced range of 50 per cent and 51 per cent, driven by stronger results from a company-wide efficiency program.
E&P analyst Paul Mason said the board restructure would play heavily on investor minds and he believed it indicated that “some board members were wanting to shrink Richard’s role further than he was wanting to”.
“In terms of management and board, we believe there were great concerns in the market about whether Richard White was being pushed out under pressure from the media and maybe the board, with some investors having relayed to us their concerns that maybe someone on the board was leaking information to the media,” he said.
“The initial reaction from speaking to people last week after the trading halt went into effect was a panic as to whether Richard was actually going to resign due to board pressure.”
The group called for the trading halt last week, pending an update on a governance review involving Mr White, who resigned last year following allegations he exchanged business advice for sex.
Investors were expecting the company to provide an update on the review with its half-year earnings on Wednesday, but it appears to have been brought forward. Last week, company secretary Katrina Johnson had said the company needed more time.
“The trading halt is requested to enable the company to be in a position to provide an update on current board discussions relating to matters of governance,” Ms Johnson said.
“These are being considered in the ongoing board review,” WiseTech said last week. It also revealed that Mr White was yet to sign the contract of his new consulting role, which pays $1m a year – the same he received as CEO.
But the halt was lifted on Monday, more than two weeks after the company said it had received two more complaints from an employee and a supplier about Mr White’s behaviour.
WiseTech said last week that the key terms of the 10-year consulting arrangement – either via a consultancy agreement with Mr White’s company, or by amending the terms of his pre-existing employment contract – “are still in the course of being agreed”.
In the meantime, the company and Mr White “have been operating broadly in accordance with what was announced”. Mr White took only several weeks’ leave before taking on the consulting role.
Chief financial officer Andrew Cartledge is acting CEO while executive recruiter Russell Reynolds ploughs ahead with finding a replacement.
RBC Capital Markets Garry Sherriff took a “negative” view that Mr White was yet to sign his new contract but said this month that WiseTech’s “medium-term structural tailwinds remain solid” and would benefit from US tariffs.
“WiseTech has no permanent CEO in seat at present, with ex-CFO Andrew Cartledge acting as interim CEO, contributing to the uncertainty. Medium term, WiseTech should be a net beneficiary of tariffs which are likely to spur demand for CargoWise, particularly customs and compliance modules,” Mr Sherriff wrote in a note to investors.
WiseTech expects to deliver revenue of $1.2bn to $1.3bn in fiscal 2025, representing revenue growth of 15 to 25 per cent versus fiscal 2024. This compares with the company’s previous guidance of $1.3bn to $1.35bn.
Mr White, who founded the company 30 years ago, stepped down as CEO last October after a string of sensational allegations about his personal life emerged.
WiseTech has also engaged law firms Herbert Smith Freehills and Seyfarth Shaw to complete a review of the company, following the allegations involving Mr White.
“The board review has progressed, and WiseTech’s board remains committed to ensuring it takes the appropriate time necessary to conclude it,” the spokeswoman said on Friday.
The law firms have examined allegations, including that Mr White failed to disclose a number of “close personal relationships” in the workplace with the board, had misused WiseTech funds to have plastic surgery in 2019 and host former lover Linda Rogan in New York; and engaged in bullying, harassment and intimidation – an accusation raised by former director Christine Holman.
Last November, chair Richard Dammery said the review had so far found “no evidence” of misconduct and the external lawyers had attributed Mr White’s behaviour to “creative abrasion”.
Not long afterwards, WiseTech co-founder and director Maree Isaacs sold her stake – totalling 10.2 million shares – to Mr White.
Mr White, who is worth about $15bn, tried to bankrupt Ms Rogan after she alleged he offered her business advice and a $13m mansion in Sydney’s Vaucluse in exchange for sex.
Ms Rogan purchased $90,000 worth of luxury furniture for the property, but claimed it was useless after she was locked out of the mansion when Mr White’s now wife Zena Nasser discovered the pair’s affair.
Ms Rogan successfully applied for garnishee orders to get the $90,000 from Mr White’s bank account, but he filed bankruptcy proceedings against her to get the money back.
Mr White and Ms Rogan settled their federal court dispute last month, but the legal fight sparked other allegations.
Another woman, psychologist Jenna Riches, came forward, telling The Australian Mr White had also allegedly offered her business advice in exchange for sex. The Australian also revealed Mr White purchased a property in Lane Cove in 2018 for businesswoman Marcia Kensell, before their sexual relationship also fell through.
In a recorded video message to investors at WiseTech’s annual meeting last year, Mr White said he was “truly sorry”.
“I deeply regret the impact this recent media has had on the people around me – my family, friends, loved ones, the WiseTech team, and you, our shareholders,” he said.
“While this time has been difficult and challenging, I want to assure you that this has not diminished my passion and dedication for WiseTech and what this business will achieve in the long-term.”
In December, Mr White sold about $442m of his shares in WiseTech.
Originally published as Four WiseTech directors depart over White’s new role
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