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Embattled logistics software company WiseTech Global says it will “vigorously defend” a class action lawsuit in Victoria’s Supreme Court, only weeks after CEO Richard White resigned from his position following allegations of inappropriate behaviour.
Law firm Phi Finney McDonald on Wednesday said it had initiated legal proceedings against WiseTech, alleging the company engaged in misleading conduct and breached its disclosure obligations to investors.
WiseTech chief executive Richard White resigned last month.Credit: Natalie Boog
The claim, brought on behalf of shareholders, alleges the company issued misleading financial guidance in 2019 and 2020 relating to a significant number of businesses it had acquired, and had downgraded its earnings guidance despite earlier assuring the market it was “on track”.
The action is not related to the allegations surrounding its recently departed CEO White, but Phi Finney McDonald said it was investigating whether its clients would have further claims against WiseTech relating to those issues.
“For aggressive and high-growth companies, pride often comes before a fall,” Phi Finney McDonald principal lawyer Tania Noonan said in a statement. “Good corporate governance requires a culture of compliance – not with powerful founders – but with the law.
“Investors are entitled to expect that Australian publicly listed companies have a reasonable basis for their financial forecasts. The integrity of the Australian sharemarket requires companies to immediately disclose price-sensitive information in accordance with the ASX listing rules so that investors can make informed decisions.”
WiseTech Global told investors last month that White would take a brief break before taking up a “full-time, long-term consulting role” where he will be paid the same annual salary – $1 million – that he received as chief executive.
It followed an investigation by The Sydney Morning Herald, The Age and The Australian Financial Review that revealed White paid for a multimillion-dollar house for an employee, and had been accused by an outgoing WiseTech Global director of intimidation and bullying.
White is one of the richest people in the country with an estimated fortune of $11.63 billion, according to the latest Financial Review Rich List.