For the sake of WiseTech, Richard White needs to step aside after AFP, ASIC raid
White cannot hold the tech company to the highest standards while both the corporate regulator and federal police investigate the multi-billionaire’s share trading. After a string of governance shortfalls, the optics are untenable.
However – and while there are no allegations of wrongdoing – more than $260m of on market share sales by White from late December and leading up to him taking over the board on February 22, certainly looks messy.
This was a particularly sensitive period. White, a 34 per cent shareholder, was locked in tense negotiations with the WiseTech board about his future at the company, including a consulting role.
ASX disclosures show he sold shares through January and February — a period that culminated in a savage profit downgrade on February 24. The share price plunged 20 per cent.
There will be a legal arm wrestle over what information White technically had as the billionaire was no longer an employee of WiseTech after he stepped down as chief executive last October. Until February this year he was yet to sign his contract as a consultant, although he was in regular talks with then chair Richard Dammery about the new role. This is how White was able to bypass the company’s own “blackout period” for trading shares on the basis he didn’t have access to financially sensitive information.
WiseTech declined further comment. ASIC also declined to comment but noted that, with assistance from the Australian Federal Police, it executed multiple search warrants at WiseTech’s Alexandria offices on Monday morning. Shares ended nearly 16 per cent lower on Tuesday.
Even with insider trading cases notoriously hard to prosecute, the development introduces fresh doubt into a company already grappling with perceptions of weak governance. That comes after White orchestrated his own boardroom coup earlier this year.
White has since rebuilt the board by surrounding himself with several long-term supporters, including early investor Michael Gregg and former chair Andrew Harrison. In July, he appointed Zubin Appoo, a long-time colleague, as WiseTech’s chief executive. Gregg has previously flagged he intends to retire before the annual meeting on November 21.
It now falls to very few “independent” directors to pressure White to step aside. However, the bottom line is there’s very little independent oversight of White in the boardroom.
Selldown
White has been a prolific seller of WiseTech shares, which has already unnerved some investors. Last Friday, he confirmed he offloaded another $254m over several months. According to ASX filings, he has sold 3.4 million shares between December 2024 and September.
The period under scrutiny coincides with a roller coaster ride for WiseTech’s shares. Sensational allegations around White’s personal life that emerged last October saw the billionaire initially edged out as CEO from the company he founded, only to return and tighten his grip.
Last February, four independent directors resigned en masse, including then-chairman Dammery, as White essentially sacked them by issuing his own threats of legal action against the directors. The directors who left cited “intractable differences” between White and the board.
A board-commissioned investigation looking at White was partially released in March which concluded the billionaire had misled the former board multiple times. But there were no consequences. Law firm Seyfarth Shaw that conducted the original review continues to investigate three more outstanding issues around White’s behaviour.
Even before last year’s scandal, one of WiseTech’s biggest independent shareholders, AustralianSuper, which had been a backer of the tech company since listing, had been urging White to evolve his role bring someone in as chief executive while he could remain an influence in the company. AustralianSuper responded to February’s boardroom coup by dumping its entire stake. Others reserved their Judgement, opting for a bet of blind faith. That is, to ignore the many governance red flags and to back White on working his magic that turned the tech company into a $25bn major. Big super fund Hesta for one had WiseTech on a watchlist, and was prepared to give White benefit of the doubt. It has so far come out second best.
Even before Tuesday’s selldown, WiseTech shares were down 30 per cent this year, missing out on the record run and the AI wave driving tech companies globally.
The market has made its call: the tech major that counts many of the world’s biggest logistics companies as customers, simply hasn’t been able to distance itself from the antics that emerged last year around its founder. The latest allegations are another blow to White and WiseTech’s reputation.
For White, this cannot be business as usual. This investigation is serious and will be a major distraction for months, if not a year. It may all amount to nothing, but this at least paves the way for White to rejoin the board.
For now, he needs to give WiseTech, its investors and staff, the certainty that comes with clear air – and that means stepping aside.
CSL’s horror show
Brian McNamee was chief executive of CSL during its rolled-golden era, now he’s back chairing the biotech at a time it’s looking more like nickel.
McNamee was the one who steered a former obscure government-owned plasma business through a stock market listing and into a global pharma major, helping it earn a premium price tag.
As CEO for more than two decades until 2013, he made a lot of shareholders wealthy along the way. His acquisitions were astute, including the transformational $1.1bn deal two decades ago that delivered CSL Aventis Behring, the plasma business that turbocharged CSL’s international footprint.
Now, as chair, McNamee has his work cut out to snap the once dependable CSL out of its funk. CSL has stumbled with a string of disappointments following a high-priced expansion in nephrology, an area that covers diseases of the kidneys.
The theory behind the $17bn buyout of Vifor Pharma four years ago was sound, the price was not. CSL shares are currently trading at around half the price it used to raise cash to fund part of the blockbuster deal. The rest was with debt. Since then there’s been a series of spectacular R&D disappointments, a bloated cost base, heavy capex weighing on returns and a series of profit downgrades.
While CSL can hardly be blamed for vaccine sceptic RFK Jnr making it as US health secretary and turning his country off flu vaccinations (a key reason behind the latest earnings downgrade), a planned spin-out of the Seqirus Flu business which was announced in August had all the hallmarks of being rushed, reactive and lacked CSL’s golden touch.
That all came home to roost on Tuesday with CSL opting to shelving its Seqirus demerger for now citing sluggish US vaccination rates. Seqirus revenue is now set to decline by around 15 per cent this year. CSL shares slumped 16 per cent, wiping billions from its value.
The Seqirus whiplash (a demerger very few investors were calling for in the first place) over a period of just two months, simply undermines investor confidence. It looks like CSL’s management and the board are trapped into short-term planning cycle.
McNamee says the demerger of Seqiris continues to be the preferred option, but it will only do this in a less volatile market, or when vaccination rates stabilise. Until then this adds another layer of uncertainty.
CSL chief Paul McKenzie has been in the top job now for more than two years. He was tapped for his operational expertise. He’s trying to get ahead of this by slicing $US500m of costs and getting a better outcome from CSL’s volatile R&D pipeline.
McKenzie has overhauled his top executive ranks in response, including installing new chief operating officer Mary Oates.
Still, shareholders rightly gave CSL a whack a second year in a row, issuing a strike for a year of poor messaging and incoherent strategy.
The one thing that’s encouraged the long-term backers CSL is McNamee is now taking a more proactive approach than we’ve seen in recent years. “We’ve been in these situations before,” chairman McNamee says. “We’ve seen periods of growth and faced periods of challenge. And we have come back stronger”.
johnstone@theaustralian.com.au
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Richard White has little choice but to step aside as executive chairman of WiseTech while he and three other employees remain under investigation for alleged insider trading.