AustralianSuper pulls $580m from WiseTech over lack of transition plan for Richard White

The nation’s largest super fund has sold down its stake in WiseTech Global, saying the company which has been embroiled in controversy at a leadership level did not ‘meet expectations’.

AustralianSuper has divested its stake in WiseTech. Pictured is WiseTech founder Richard White.

AustralianSuper has sold its $580m WiseTech stake because it cannot get sufficient comfort around its governance, weeks after billionaire Richard White seized back control of the software company he co-founded.

Mr White returned to the helm as executive chairman in late February following the exit of four independent directors who claimed they had intractable differences over his future. An internal review subsequently released found he misled the board over his past relationships.

AustralianSuper, which supported Mr White’s temporary move to a consulting role last October, remained quiet on the latest developments but on Wednesday said it had sold its entire holding in the homegrown tech company.

The $355bn super fund progressively sold down its $580m position over the past few weeks and at its peak had $700m invested in WiseTech. It had been WiseTech’s fourth-biggest shareholder and the second-largest outside investor in the company with a 2.79 per cent stake.

“We have been a shareholder and strong supporter of the business since its IPO in 2016, and it has created a significant amount of value for AustralianSuper members,” said Shaun Manuell, the fund’s head of domestic equities.

“We believe good governance is essential to delivering the value we identify in a company. As a long-term active manager, our role is to allocate members’ retirement savings to the companies we think are most likely to create value over the years to come.

“We needed to see a sensible transition plan that got the balance right between governance and managing the founder’s role over time in order to continue to remain a shareholder,” he said.

“We have sold because recent developments have not met our expectations. We may reconsider our position should circumstances change.”

WiseTech executive chairman Richard White, former chairman Richard Dammery and interim chief executive Andrew Cartledge at the company’s investor day in Sydney last year.

WiseTech shares closed up 0.3 per cent on Wednesday, representing a market value of $28.8bn.

AustralianSuper last year endorsed Mr White’s resignation from WiseTech’s board and executive ranks, following accusations of bullying and exchanging business advice for sex.

In October, Mr White agreed to a founding CEO title and a consulting role, putting a stop to the drama surrounding the logistics software giant and ensuring continuity of strategy.

But that was short lived; he is now WiseTech’s executive chairman.

Industry super fund HESTA has been vocal in its criticisms, last month demanding the tech giant restore an independent board after the four independent directors quit in protest.

CEO Debby Blakey on Wednesday told The Australian the fund was still engaging with senior leaders at WiseTech over its leadership and governance concerns, and “monitoring the situation closely”.

“To help restore investor trust, we believe there is a critical need to appoint a board whose majority is genuinely independent, including the appointment of a new lead independent director; deliver meaningful action in response to the board-commissioned reviews; and provide clarity on an orderly leadership transition,” Ms Blakey said.

“We regularly assess our portfolio in the interests of our members and await further updates on these matters.”

AustralianSuper’s sell down came as no surprise to Australian Shareholders Association chief executive Rachel Waterhouse.

“Industry superfunds are focused on company performance and governance and their decision making around what they hold and sell often aligns with their views as well as those of their members,” she told The Australian.

Ms Waterhouse said retail investors had major concerns over WiseTech’s governance and had demanded to see an action plan on how the company would address those issues.

The major sell down arrives just one week after an independent review commissioned by WiseTech found Mr White had misled the WiseTech board over his personal relationship with an employee.

WiseTech executive director and co-founder Maree Isaacs.

The review, which is continuing, prompted the board to conclude a “number of the matters are serious in nature, and that such conduct is not acceptable and must not be repeated”, WiseTech said in a statement.

The update also included preliminary findings regarding two further complaints WiseTech assessed after receiving them in February this year regarding Mr White, an employee and a WiseTech ­supplier.

WiseTech’s second partial update was drawn from a review undertaken by Herbert Smith Freehills and Seyfarth Shaw.

The company has refused to release the full independent review, a decision that led to the mass exodus of four board directors earlier this year.
Mr White accepted the preliminary findings of the review and supported the adoption of a stricter code of conduct, the statement said.

“Mr White has indicated that while those matters were personal in nature, with the benefit of hindsight he would have more (fully) disclosed them to the board and handled the contracting process differently,” WiseTech said.

“Mr White understands the importance of his role in creating and influencing the culture of the business, and the seriousness of his actions.”

Last week, a spokeswoman for Mr White told The Australian that neither Mr White nor his lawyers Clayton Utz had received or seen a full copy of the Seyfarth Shaw report.

Originally published as AustralianSuper pulls $580m from WiseTech over lack of transition plan for Richard White