WiseTech raided by competition watchdog, smashing shares

The competition watchdog has raided WiseTech Global, sending its shares plummeting and making it the third regulator or police force to investigate the logistics software company or its billionaire founder, Richard White.

WiseTech told the ASX on Wednesday that an Australian Competition and Consumer Commission (ACCC) search warrant had been executed on the company as part of an investigation into alleged breaches of competition law, requiring it to produce documents and electronic data relating to the supply of global logistics services and software. The company said it intended to fully cooperate. Its shares fell about 11 per cent to $38.58.

WiseTech has been embroiled in controversy over the past two years, and this action is the first by a regulator aimed squarely at the company rather than at White personally. The Australian Federal Police is investigating White over allegations first reported by this masthead that he coerced a former WiseTech cleaner into a sexual relationship and provided false information to secure her a visa, claims he denies.

The Australian Securities and Investments Commission is separately investigating share trades worth more than $200 million that White made during a company blackout period. The company has previously said White obtained independent legal advice before undertaking the trades.

The company’s CargoWise platform is the dominant software used by Australian customs brokers and freight forwarders to lodge import declarations, and its $US3.2 billion acquisition of US rival e2open last year expanded its reach to more than 500,000 connected businesses. The company says it serves about 22,000 logistics firms across 193 countries, including 46 of the world’s 50 largest third-party logistics providers.

The warrant follows a board shake-up in early July, when WiseTech appointed Raelene Murphy as independent chair and White moved to an executive director role while continuing as chief innovation officer. The industry superannuation fund HESTA called the appointment a positive step at the time but said uncertainty remained for investors, and kept the company on its watchlist.

An ACCC investigation does not mean the regulator has formed a view that the law has been broken. The watchdog can take civil proceedings in the Federal Court seeking penalties if it decides to act, and no allegations have been made in court.