WiseTech board purge triggers $9b share plunge as White scandals widen
Former director Mike Gregg will rejoin the board that day to ensure the company has the number of directors needed to be publicly listed.
The other board members are Maree Isaacs, co-founder and company executive, and Charles Gibbon, a director for 19 years.
Analyst commentary after the board exodus highlighted that – whatever the issues with his personal behaviour – investors’ main concern was that White retains control of the spectacularly successful business he founded, having turned it into the biggest tech company on the Australian sharemarket.
E&P analyst Paul Mason said the independent directors’ departure probably resolves that fear, albeit with a need to bring on quite a number of new independent directors now.
“In terms of management and board, 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,” Mason said.
“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.”
WiseTech also downgraded its financial forecasts on Monday, saying revenue would be at the low end of the forecasts given at its annual meeting in November last year, but profit margins would be at the top end of its guidance due to cost-cutting measures.
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White and WiseTech were plunged into turmoil last year following an investigation by The Sydney Morning Herald, The Age, and The Australian Financial Review. The investigation revealed that White had paid for a multimillion-dollar house for an employee and that an outgoing WiseTech Global director had accused him of intimidation and bullying.
Speaking at the company’s annual shareholder meeting in November, chairman Dammery said the group would downgrade its financial guidance due to the scandal.
“Upfront, 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,” Dammery said.
Monday’s financial guidance downgrade was due to those product delays, the company said.
WiseTech has become a world-beating tech giant by offering logistics companies software to manage their operations more efficiently, which also gives it unparalleled insights into global trade via some of the world’s largest freight forwarders, such as FedEx, UPS and DHL.
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