AustralianSuper, the country’s largest pension fund, has recently sold A$580 million ($367 million) worth of shares in WiseTech Global Ltd.. The divestment follows concerns over the Sydney-based freight software company’s corporate governance.
The move comes after WiseTech appointed its founder, Richard White, as executive chairman last month, just four months after he had stepped down as CEO. White’s resignation was preceded by damaging media reports, including allegations that he had paid millions to a former partner to settle inappropriate behavior allegations. Despite these reports, WiseTech’s board stated it will not take action against White this month.
The decision to release White’s comeback was timed with WiseTech’s first-half results to December, which showed a 38% increase in net income to $106 million from the previous year. However, the founder’s return has sparked concerns among investors about the company’s governance practices.
AustralianSuper reduces stake amid concerns
“We have sold because recent developments have not met our expectations,” confirmed Shaun Manuell, head of Australian equities at AustralianSuper, in an emailed statement. “We may reconsider our position should circumstances change.”
As of October, AustralianSuper, which manages more than A$365 billion, held a 2.3% stake in WiseTech. Their ownership interest fell to 1.9% last month amid the unfolding concerns.
We needed to see a sensible transition plan that got the balance right between governance and managing the founder’s role over time to continue to remain a shareholder,” Manuell added. WiseTech shares have fallen almost 30% since White’s return to the company. Meanwhile, White’s real-time net worth has dropped to $7.2 billion from $10.1 billion since the publication of Australia’s 50 richest list in February.
Speaking at the Morgan Stanley Australia Summit last June, Richard White noted that these developments are part of an ongoing process to fortify WiseTech’s market position. However, the recent sell-off by AustralianSuper reflects growing unease among investors regarding the company’s governance and leadership decisions.
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