WiseTech investors demand answers as ex-chair steps in amid AFP probe
WiseTech’s former chair has held crisis talks with investors without billionaire founder Richard White after AFP raids wiped $5bn off the tech giant’s market value amid an insider trading probe.
WiseTech Global’s former chair Andrew Harrison is quietly meeting investors to reassure them the company remains on track amid an escalating boardroom scandal, as founder Richard White faces mounting pressure to step aside.
Days after Australian Federal Police and the corporate watchdog raided WiseTech’s headquarters in Sydney as part of an alleged insider trading investigation, Mr Harrison held talks with shareholders – without Mr White.
Mr Harrison returned to the company in March as ‘lead independent director’. His re-emergence suggests he would be named acting chair if Mr White is forced to step aside during the investigation, which some analysts say could take 18 months.
The mounting controversies have prompted investors, including industry fund Hesta, to plead for an independent voice inside the boardroom to steady the $23.6bn logistics software giant. About $5bn has been wiped off WiseTech’s market value this week and its shares are now worth about half as much as what they traded at late last year before Mr White became embroiled in a separate sex scandal.
ASA chief executive Rachel Waterhouse said WiseTech was relying too much on Mr White for leadership and innovation, while some analysts have expressed concern that Mr White’s successor as CEO, Zubin Appoo, is yet to prove himself in the market, having only been appointed in July.
“Retail investors have seen a sharp fall in WiseTech Global’s share value, particularly in recent days since ASIC and the AFP raided the company’s offices over alleged share trading by founder Richard White and three employees,” Ms Waterhouse said.
“The Australian Shareholders’ Association continues to call for stronger governance and greater board independence to ensure effective oversight and accountability. With an executive chair who is not independent and ongoing reliance on the founder for leadership and innovation, it is disappointing for long-term shareholders to see corporate responsibility and governance handled in this way.”
Mr White resigned as chief executive last November after several women accused him of exchanging business advice for sex – which he denies. He seized on a power vacuum in February, consolidating his influence to return as executive chairman. Mr White has since rebuilt the board by surrounding himself with several long-term supporters. Four new directors, including Mr Harrison, are set to be elected at WiseTech’s annual meeting next month.
Mr Harrison met with the ASA on Wednesday. Mr White was absent. Hesta, which threaten to sell its 0.6 per cent stake in the company in the wake of the raids and ongoing governance woes, is also “continuing to engage with the company”.
“Investors are seeking confidence that the board can manage stability and long-term value creation. We are engaging with investors, will continue to monitor the situation closely, and will attend the AGM,” Ms Waterhouse said.
Mr Harrison was WiseTech’s chairman for five years until late 2023. He was a member of Mr White’s board from 2015, joining a year before the tech company went to a stockmarket listing.
In March he replaced Michael Gregg – an early WiseTech investor who had only rejoined the board in February – as lead independent director.
The move attracted criticism from Hesta and the ASA, which have both called for more independent directors on the board.
ASX filings show Mr White sold shares through January and February – a period that culminated in a savage profit downgrade on February 24. ASIC is investigating these trades and three other senior WiseTech employees. During this period, Mr White, a 34 per cent shareholder, was negotiating with the WiseTech board about his future at the company and consulting role. After failing to agree to the exact terms of his new position, former chair Richard Dammery and three other directors quit the company in late February, paving the way for Mr White’s return as executive chairman.
Mr White was not on WiseTech’s board or an executive during the trades in question, therefore bypassing the company’s “blackout period”, given he didn’t have access to financially sensitive information. This is central to ASIC’s investigation.
Macquarie analysts say the probe could take about 18 months. No charges have been laid. The investigation is complicated by the need for the regulator to access information.
WiseTech says it will co-operate with the investigation. But Macquarie and Jarden analysts are concerned the probe will “consume” management’s attention.
WiseTech is set to hold its annual meeting on November 21.
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