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Scandal Over Ex-Lover Cuts Billionaire WiseTech CEO’s Wealth
(Bloomberg) -- Richard White, the Australian billionaire battling allegations of inappropriate behavior with women, has said he has a relaxed relationship with risk.
“It’s perhaps a personality trait, but I’m not frightened by risk or uncertainty,” the WiseTech Global Ltd. chief executive officer told a podcast last year. “If you have risk you can turn it into something.”
Now, the self-made tech mogul is facing what’s likely his biggest risk since founding his shipping software company in 1994. Over the last three weeks, the drip of revelations from a court battle with alleged former lover Linda Rogan has gripped Sydney’s business elite.
The case was settled out of court on Friday, according to a representative in barrister Bridie Nolan’s office, who asked not to be named because they aren’t authorized to speak publicly. Nolan was representing wellness entrepreneur Rogan, who White had filed bankruptcy proceedings against. A notice of discontinuance was filed with the Federal Court of Australia on Monday.
The case had largely been left uncommented on — in public — by WiseTech’s board of directors.
That changed on Monday when the board said it’s reviewing “the full range of matters” raised in fresh media reports about separate matters concerning White’s alleged historical inappropriate behavior. The company’s shares plunged 15% on Monday.
That has wiped $2.9 billion from his fortune, which peaked at $11.1 billion three weeks ago, according to the Bloomberg Billionaires Index.
The stock fell a further 3.2% early Tuesday, before erasing the loss after news of the settlement broke, to be trading up 1.6% at 1:20 p.m. in Sydney.
“A founder CEO of a major Australian company is a public figure, front and central to the name, brand and success of the company,” said Helen Bird, senior lecturer at Swinburne Law School in Melbourne. “When the price of the stock drops in consequence of one of these type of news stories, it suggests that the reputation of the company has been affected.”
The Australian Council of Superannuation Investors, which represents some of the country’s largest pension funds, said the matter was a “major concern” for investors and called for the WiseTech board to investigate and respond appropriately.
White’s woes were thrust into the spotlight by his attempt to push Rogan, with whom he is alleged to have had a sexual relationship, into bankruptcy, according to the Australian Financial Review. Earlier this month, she applied to have the bankruptcy notice set aside. In an affidavit, she alleged White expected her to have sex with him in exchange for an investment in her business.
The scandal entered a new phase on Monday, when the Australian Financial Review, the Sydney Morning Herald and the Age — citing sources they didn’t identify — reported White had paid millions of dollars to a former sexual partner to settle allegations made in late 2020. The newspapers said White had provided a board subcommittee with a statutory declaration denying the claims.
WiseTech spokeswoman Catherine Strong referred all questions for White to Helen Karlis, a representative for his lawyers. Karlis didn’t reply to emails and phone calls seeking a response from White.
White has sold A$368 million ($245 million) of WiseTech stock since Aug. 23.
AC/DC
White grew up in the middle class Sydney suburb of Bexley dreaming of being a rock star, eventually leaving school to pursue the ambition. It soon soured.
“I played in a band for a number of years, but I realized it was a very tough industry to work in,” he told the Australian Investors Podcast. “You got a lot of fame and attention, but you got no money.”
He then began fixing guitars, and became so proficient that he even repaired the guitars of AC/DC’s Angus Young.
“It was very profitable,” he said on the podcast. “But I realized it was a service business that I couldn’t scale.”
In 1994 he and Maree Isaacs founded WiseTech, which is a key provider of the software that coordinates logistics and shipping across the world. Twenty-two years later the company was valued at A$1 billion when it listed on the Australian Securities Exchange.
The following year it entered the S&P/ASX 200 and today it employs 3,300 people across 37 countries. It claims the majority of the world’s biggest global logistics providers and freight forwarders among its clients, including DHL, China’s Sinotrans, Japan’s Nippon Express and APL Logistics.
In a nation with a number of high-profile billionaires — White is currently 10th on Australia’s rich list with an $8.2 billion fortune, two places lower than Friday — he is one of the most colorful. In 2014, the tech founder purchased his childhood home in Bexley — which had previously doubled as an event center for a business run by his grandparents — and turned it into a compound with numerous residences. His mother lives in one of them.
But while his private life was at times lavish, his company WiseTech was a solid performer, growing to become a global supply-chain powerhouse through a series of acquisitions.
White is WiseTech’s largest shareholder, making the current situation the board faces particularly challenging.
“The recent reports have undoubtedly cast a shadow over the company’s reputation,” said Megan Motto, the CEO of the Governance Institute of Australia. “Markets are highly sensitive to such news, especially when it involves the personal conduct of a high-profile founder.”
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--With assistance from Amy Bainbridge and Angus Whitley.
