WiseTech review finds ‘no evidence’ of misconduct by billionaire founder Richard White

Richard White has addressed shareholders in a pre-recorded message of ‘deep regret’ at WiseTech’s AGM where a review found his conduct was ‘generally consistent with the process of creative abrasion’ | WATCH

Lawyers who have been reviewing sensational allegations that led to WiseTech’s billionaire founder Richard White stepping down from the company’s board and executive have so far found “no evidence” of misconduct, attributing his behaviour to “creative abrasion”.

The $40.72bn logistics software group released an update of the review from Herbert Smith Freehills and Seyfarth Shaw on Friday as it prepared to face investors at its annual meeting - which it decided to a hold online only, rather than in-person, a move that angered the Australian Shareholders Association.

The law firms examined five 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.

Mr White then appeared at the annual meeting in a pre-recorded video message.

“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. I am truly sorry for how this has affected each of you,” 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.”

Richard White during WiseTech’s virtual AGM.

The review found that Mr White’s behaviour was “generally consistent with the process of ‘creative abrasion’, which was widely acknowledged... to create significant value for the organization”.

“However, there is the capacity for managers to find this uncomfortable and confronting, particularly in group settings.”

The company also cut its annual earnings guidance - sparking share price fall of up to 20 per cent on Friday morning - with chairman Richard Dammery citing the allegations that led to Mr White standing aside. It clawed back almost half those losses, with its shares closing 12.4 per cent lower at $121.74.

The board said Seyfarth Shaw concluded that Mr White had disclosed his close personal relationship under “relevant policies”.

“There is no evidence that any required matters have not been disclosed to the board. Seyfarth Shaw are further satisfied that the close personal relationships set out in Mr White’s disclosures were in each instance previously disclosed or known to relevant WiseTech officers and senior managers,” the statement said.

“With respect to the allegations concerning reports of a romantic relationship between Mr White and a current employee, the relationship predated the individual’s work at WiseTech and was disclosed and known to officers and senior management at the time.

“There is no evidence that the current employee in question received remuneration or employment benefits that were in excess of other employees in an equivalent position. The process for reviewing that employee’s remuneration was conducted by other managers in accordance with usual processes.”

In regard to Mr White’s expense claims, including an allegation that he misused company funds to undergo plastic surgery, Seyfarth Shaw said there was “no evidence of inappropriate use”.

Richard White and wellness entrepreneur Linda Rogan. Picture: NewsWire

“The allegation that Mr White wrongly claimed for personal expenses or charged them to WiseTech is not supported by evidence. Specifically, there is no evidence to support the allegation that plastic surgery expenses were incurred by WiseTech.

“To the contrary, Seyfarth Shaw have been provided with evidence that these expenses were incurred and paid for personally by Mr White and they are satisfied that this is what occurred.

“Further, there is no evidence that WiseTech incurred any expenses related to Ms Rogan, in relation to New York accommodation or otherwise. The Review received evidence and Seyfarth Shaw is satisfied that all travel and accommodation expenses incurred by WiseTech in relation to Mr White’s travel to New York were reasonably incurred and business-related.”

The board said Seyfarth Shaw found that he expenses associated with the plastic surgery and accommodation in New York were “separately confirmed” by a forensic investigation performed by McGrathNicol.

In regard to Ms Holman’s allegations of “bullying and intimidatory behaviours”, the board said the review “contemplated whether such behaviour was occurring in the current environment”.
“In relation to Mr White’s conduct in the workplace, based on inquiries to date, Seyfarth Shaw has concluded that there has not been repeated unreasonable behaviour, or behaviour that could be characterized as “bullying” or “intimidatory” or otherwise unlawful.

“Seyfarth Shaw also found that Mr White has a direct approach and that from time to time is involved in robust and challenging discussions.

“This is generally consistent with the process of “creative abrasion”, which was widely acknowledged in the review to create significant value for the organization. However, there is the capacity for managers to find this uncomfortable and confronting, particularly in group settings.”

Mr White stepped down from WiseTech’s board and executive in late October - on the same day the logistics software titan celebrated its 30th anniversary.

After resigning as chief executive and a director, Mr White has moved into a new consulting role, with the title of founder and founding CEO, and will maintain his $1m a year salary.

Chairman Richard Dammery said the findings were “largely the result of work conducted by Seyfarth Shaw, who interviewed 21 people in 30 interviews”.

“The advisers also retained specialist support as needed, including forensic accounting support. Each of the findings, which is self explanatory, indicates no impropriety by Richard White, in relation to the affairs of the company.”

WiseTech now expects to deliver FY25 revenue of $1.2bn to $1.3bn, representing revenue growth of 15 to 25 per cent versus FY24. This compares with the company’s previous guidance of $1.3bn-$1.35bn.

Earnings before interest, tax, depreciation and amortisation is expected to be $600m–$660m. This compares with previous guidance of $660m –$700m.

“I need to say that the board is disappointed that the diversion of Richard White’s attention away from product development at a critical juncture has impacted the timing of the release of some of the three breakthrough products. This will result in changes to both revenue and earnings guidance,” Mr Dammery said.

Mr White, who is worth about $15bn, tried to bankrupt former lover Linda Rogan, after she alleged he offered her business advice and a $13m mansion in Sydney’s Vaucluse in exchange for sex.

Jenna Riches.

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.

WiseTech is also facing an investor class action, filed by Phi Finney McDonald last week, alleging the company breached its continuous disclosure obligations over its earnings guidance five years ago.

WiseTech said in a statement that it would “vigorously defend” the proceedings.