WiseTech founder Richard White ‘misled’ board on personal relationships, review reveals

An independent review into the actions of WiseTech’s controversial founder Richard White has revealed he made incomplete and, at times, misleading disclosures about personal relationships.

The board’s decision to take no further action, despite admitting three separate matters are yet to be investigated, has been criticised by the Australian Shareholders Association.

“The Australian Shareholders’ Association urges the Wisetech board to release the full Board report into matters relating to its Co-Founder and Executive Chair, Mr Richard White, as well as Board composition. Partial disclosures create uncertainty and undermine shareholder trust,” ASA CEO Rachel Waterhouse said.

The review, initiated on February 26 and conducted by law firm Seyfarth Shaw, investigated Mr White’s disclosure about personal relationships with employees and suppliers, third-party business dealings and allegations of unlawful discrimination and gender pay inequality.

Mr White was forced to resign from his executive role in October last year over allegations he unduly used his influence to attempt to gain sexual favours, including purchasing a property for wellness entrepreneur Linda Rogan, paid for a multimillion-dollar house for Christine Kontos, a product manager at the logistics software firm he had been in a relationship with, and awarded a lucrative contract to a then-lover.

The revelations, reported by Nine media, initially resulted in a 20.5 per cent fall in the company’s share price in the days leading up to Mr White’s initial resignation.

A previous review, conducted by Herbert Smith Freehills and Seyfarth Shaw and tabled in November, had cleared Mr White of any wrongdoing.

Last month, a board coup saw Mr White reinstated as executive chair and prompted the resignation of four independent directors.

The latest review, released to the market on Wednesday, found Mr White “made inaccurate and incomplete disclosures concerning the nature and duration of his relationship” with one employee; “was not fully transparent and candid”, and “misleading about personal matters concerning the ending of the relationship” during a board review.

Regarding his relationship with a woman who was a supplier to WiseTech, Mr White “made incomplete disclosures concerning the nature and duration of his relationship”.

“The commercial relationship was entered into where there were undisclosed conflicts of interest between the interests of WTC and the private interests of Mr White,” the review found.

During the review, one of the complainants elected not to come forward, with the law firm determining allegations regarding remuneration and working unreasonable hours were unsubstantiated.

In releasing the findings, the board - led by non-independent director Mike Gregg - “acknowledges the legitimate governance concerns raised in the board review findings” but will take no action against Mr White.

“The board sub-committee has indicated to Mr White that a number of the matters are serious in nature, and that such conduct is not acceptable and must not be repeated,” the release said.

Mr White will continue in his role as executive chair, with the board noting “Mr White accepts the findings of the board review and has committed to, and is supportive of, a new and more stringent code of conduct in respect of such matters”.

“Mr White understands the importance of his role in creating and influencing the culture of the business, and the seriousness of his actions,” it said.

The Australian Shareholders Association said it would monitor developments and push for genuine governance improvements including independent directors to restore shareholder confidence.

“The review confirms the CEO failed to disclose a personal relationship with an employee to the Board, raising serious governance concerns. While WiseTech plans to strengthen its Code of Conduct, cultural and operational reforms are also necessary,” Ms Waterhouse said.

Institutional investors were relatively unmoved by the finding, with shares falling a little over two per cent to close near $83.

In the months since the revelations about Mr White appeared in the media, shares in WiseTech have fallen 35 per cent, compared to the ASX tech index, which is up 2.6 per cent.