Shares in WiseTech Global have plunged on news four board directors, including the chair, have quit due to a dispute about the ongoing role of founder, billionaire Richard White.
The four independent directors have resigned, effective Wednesday, citing “intractable differences” among the board and “differing views” on Mr White’s continued engagement with the company.
At 10:20 am AEDT, WiseTech shares were down more than 17 per cent after resuming trade following a halt last Thursday.
WiseTech has been dealing with the fallout from Mr White’s alleged inappropriate behaviour since late last year.
Mr White, who co-founded the logistics software company in 1994, stepped down as chief executive in October after details of a personal legal battle hit the front pages.
However, he remained with the company on a full-time basis, under the title “founder and founding CEO”, for at least a 10-year term on his existing pay of $1 million a year.
Mr White later settled a civil lawsuit with his alleged lover, wellness entrepreneur Linda Rogan.
Concerns about Mr White’s conduct extended beyond the personal to the professional, and the board appointed law firms to conduct a review into allegations he failed to disclose personal relationships in the workplace.
On Februarty 10, WiseTech confirmed that it had received two complaints against Mr White, one from an employee and one from a supplier to the company.
The board said the allegations would be considered as part of its ongoing review.
It also noted that details of Mr White’s role at the company were “still in the course of being agreed”, with a consultancy agreement or amendments to his pre-existing employment contract yet to be confirmed.
Just two current directors remain after exodus
Announcing the board exodus on Monday, WiseTech said Richard Dammery, the independent chair of the board, along with directors Lisa Brock, Michael Malone and Fiona Pak-Poy “have determined it is in the best interests of the company to stand aside”.
Just two current directors remain on the board — Maree Isaacs, who co-founded WiseTech with Mr White and has been executive director since 1996, and Charles Gibbon, who has been an independent director since 2006 and was chair until September 2018.
WiseTech said Mike Gregg will commence as a director on Wednesday, “subject to the satisfaction of customary director background checks”.
Mr Gregg previously served as an independent director on the board from 2006 to 2022.
The company provided an update on its financial performance, ahead of the release of its half-year results on Wednesday.
It said revenue would come in at the bottom of the range it had previously flagged, due to further delays with product rollouts, but said earnings margins would be at the top end of its guidance range, due to a “company-wide efficiency program”.
While the stock sell-off on Monday morning indicated the ongoing turmoil has shaken investor confidence, E&P analyst Paul Mason said investors he had spoken with wanted to see Mr White remain with the company.
“We believe there were great concerns in the market about whether Richard White was being pushed out under pressure from the media and maybe the board, with some investors having relayed to us their concerns that maybe someone on the board was leaking information to the media,” Mr Mason wrote in a note.
“The initial reaction from speaking to people last week after the trading halt went into effect was a panic as to whether Richard was actually going to resign due to board pressure.
“This announcement probably resolves the main fear that the market had in a positive light, albeit with a need to bring on quite a number of new independent directors now. Hopefully this brings an end to the product delays that have been cited again.”
