WiseTech Global Ltd has been thrown into crisis following the resignation of four independent board members, triggering a sharp sell-off in its shares.
The A$41 billion software company saw its stock drop as much as 22% when trading resumed on Monday, reaching a low of A$94. By mid-morning, shares were still down 19% at A$99.02.
Investors reacted to the abrupt departure of four key board members, who stepped down after failing to reach an agreement with company founder Richard White over his ongoing role.
In a statement to the ASX, WiseTech said the decision was made "in the best interests of the company". The board cited "intractable differences" regarding White, who holds a 38.7% stake in the company despite stepping down as chief executive last year following allegations of bullying and inappropriate conduct.
Boardroom fallout amid allegations
The resignations come as new allegations emerge against White, including claims that he provided financial and visa support to a female employee in exchange for a sexual relationship. Reports also highlight tensions with his wife Zena Nasser amid allegations of blackmail and concerns over his growing influence in the company.
The departing board members — chairman Richard Dammery, Lisa Brock, Michael Malone and Fiona Pak-Poy — will officially resign after finalising the company’s half-year financial results on Wednesday.
Former director Mike Gregg will return to maintain the board’s required membership for public listing. Remaining directors include co-founder Maree Isaacs and long-standing board member Charles Gibbon.
Investor reactions and market concerns
Despite ongoing controversies, analysts say investors are most concerned about White’s control over WiseTech. E&P analyst Paul Mason noted that market fears about White being ousted due to media and board pressure appear to have been resolved with the resignations. However, WiseTech will now need to appoint several new independent directors.
WiseTech also revised its financial outlook on Monday, forecasting revenue at the lower end of previous estimates. However, profit margins are expected to remain strong due to cost-cutting initiatives.
The company attributed the downgrade to delays in launching key software products, which have been affected by recent leadership distractions.
Challenges ahead
WiseTech has grown into a major player in global logistics software, serving clients such as FedEx, UPS and DHL. However, the company has faced turbulence since last year when an investigative report revealed White had purchased a multi-million-dollar house for an employee and had been accused of intimidation and bullying.
At the company’s annual shareholder meeting in November, Dammery acknowledged that White’s ongoing issues had impacted operations. Monday’s financial guidance downgrade reinforces those concerns.
With a leadership overhaul now underway and White still in control, WiseTech faces mounting pressure to restore investor confidence and stabilise its corporate governance.