WiseTech founder Richard White’s scandals hits profit outlook

Billionaire WiseTech found Richard White has told investors he will “remain a substantial shareholder for a very long term” as an internal review into his conduct determined that he did not act inappropriately.

One of Australia’s richest men, Mr White’s wealth fell $1.3 billion Friday on news the “media distraction” of allegations he had inappropriate dealings with romantic partners and had acted in a bullying fashion toward a former director had delayed the release of core products.

Mr White has been steadily reducing his stockholding but still holds 115 million shares worth $15.87b at the close of trade Thursday. Following a downgrade in revenue forecasts ahead of the annual general meeting Friday, WiseTech shares plunged 10 per cent, reducing the value of his holding to $14.7b.

The company said the commercial launch of its Container Transport Optimisation project had been pushed back to the second half of fiscal 2025 as a result of Mr White’s attention being pulled away to deal with the media storm at “a critical juncture”, resulting in a delay to anticipated revenue.

WiseTech said it now expects full-year revenue of between $1.2b and $1.3b, down from between $1.3b and $1.35b.

Earnings before interest tax depreciation and amortisation was now forecast to come in at between $600 million and $660m.

The company said it was confident that new product pipeline would remain relatively unaffected.

Mr White stepped down as chief executive in October 24 to take up a full-time, long-term consulting role in the product division.

“The board is disappointed that the diversion of Richard White’s attention away from product development at a critical juncture,” chair Richard Dammery said.

“These impacts are timing issues, not a stalling of growth; but suffice to say that the complications in Richard White’s personal situation, and the flow on impacts to how the product development teams have been able to tap into Richard’s support, have been more material than the board initially expected.”

WiseTech has been dogged by a series of media reports that alleged Mr White unduly used his influence to gain sexual favours, paid for a multimillion-dollar house for an employee that he had been in a relationship with, and awarded a lucrative contract to a then-lover. In 2019, former director Christine Holman resigned accusing Mr White of “sustained intimidation and bullying”.

In a video statement to shareholders, Mr White said he “deeply regret(s) 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’m truly sorry for how this has affected each of you”.

“I want to assure you that this has not diminished my passion and dedication of Wisetech and what this business will achieve in the long term,” he said.

A board-led review into Mr White’s behaviour by law firms Herbert Smith Freehills and Seyfarth Shaw and forensic accountants McGrathNicol released to coincide with Friday’s AGM found that overall there was not any financial impropriety.

The review concluded:

Personal relationships

Mr White disclosed all close personal relationships in the workplace, including romantic, familial, or long-standing ones, as required by company policies. Allegations of a romantic relationship with a current employee were found to predate the employee’s employment and were disclosed. There was no evidence of preferential treatment.

Business transactions

Allegations of misuse of company funds for personal expenses were not substantiated. Forensic analysis confirmed that White personally paid for plastic surgery, and no evidence was found of company expenses for accommodations for White’s acquaintance. Transactions with a supplier with whom White had a close relationship were consistent with market prices, with no evidence of impropriety.

Governance and Workplace Conduct

The review concluded that past debates on key management personnel disclosures were appropriately addressed with no need for revision. While White’s direct communication style was sometimes uncomfortable, it aligned with the company’s culture of “creative abrasion”. There was no evidence of bullying, intimidation, or unlawful behaviour.

In response to a shareholder question about intimidation, Mr White told investors he had a good relationship with previous and current chair.

“I don’t have any problems in speaking strongly about what I think is right for the company. They are intellectual debates: I’ve never taken the view that I need to push or harass or do anything else other than speak logically and intellectually, particularly like intellectual debate we have, and I have that with the whole of the board.”

Despite the reports of questionable behaviour over a period stretching back over a decade, shareholders have easily waved through the directors’ remuneration report by 98 per cent, with a mere 1.9 per cent voting against. Mr White, who retains at 32 per cent stake in the company recused his voting shares from the remuneration vote.

There was near unanimous support for increasing non-executive director’s remuneration be increased from a maximum of $1.8 million to $3m.

The company also flagged that it expected the imposition of tariffs by a Trump administration in the US would be beneficial to the company, as it would add the kind of trade complexity that favoured WiseTech.

“Any time supply chains become more complex or regulations are imposed allows us to adapt the system to be able to deal with the challenges that we have,” said interim chief executive Andrew Carteledge. “That not only helps our existing customers but it also attracts new customers to the platform over the long term.”

Research analysts at E&P and RBC said the company would receive solid investment support going forward.

“Although it is disappointing that recent events have resulted in guidance being downgraded, the board review interim update as well as the additional transparency provided throughout the process, provides encouragement that WTC will be able to move on from the recent issues and continue to focus on the business going forward,” wrote RBC.