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Billionaire Richard White’s personal controversies have finally started to bleed into the affairs of his company, WiseTech Global, with investors fearful that White’s Lothario-type behaviour may force him to step back from running the $36 billion company.
That fear triggered a multibillion-dollar rout in WiseTech’s share price on Monday and, perversely, the collapse is a testament to the importance of White to the company.
As far as the market is concerned, there is no WiseTech without White. It’s the textbook definition of “key man risk”, one that is likely to now put the tech company’s board under severe pressure to act.
Linda Rogan is challenging a bankruptcy notice issued by Richard White.Credit: Nick Moir and Oscar Colman
The scandal engulfing White began a few weeks ago and initially involved one allegation in a Federal Court dispute that he expected sex from beauty entrepreneur and Real Housewives of Sydney contender Linda Rogan in exchange for business advice.
The allegation was salacious but, in a corporate sense, seemed containable. However, new allegations of inappropriate advances on LinkedIn published by Nine on Monday added a serial flavour to the allegations about White, which had been contained in an affidavit by Rogan, who is applying to toss out bankruptcy proceedings brought by White.
To ignore the new claims from other women — one of whom branded White the “LinkedIn Lecher” — is no longer an option for the WiseTech board. It released a statement on Monday stating it was reviewing the full range of matters outlined in the media and “taking external advice”.
Sure, the alleged scandal is personal in nature but captains of industry need to exercise judgment, particularly if they are responsible for listed companies and are investing shareholders’ capital.
But how the board deals with White is quite the dilemma. As the founder and brains behind WiseTech, and its largest shareholder, White enjoys asymmetric power. Directors and shareholders may not approve of how he conducts his personal life, but an extended fall in WiseTech’s share price will shred their hip pockets – and shareholders will hate that even more.
Until this scandal exploded, WiseTech shareholders had experienced a dream run with the company’s share price up 122 per cent year-on-year. White has been lauded as an Australian tech success story, creating and leading the premier software provider for global logistics, a niche but critical cog of the global economy.