(Bloomberg) — The sex-for-investment scandal that swiftly deposed Australian tech billionaire Richard White is just the latest corporate calamity in a country fast losing its reputation as a tightly-regulated market with strict governance standards.

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More than A$7.7 billion ($5.1 billion) of market value has been wiped from WiseTech Global Ltd. (AU000000WTC3.SG, WIGBY) this week before White suddenly stepped down as chief executive officer late Thursday. His resignation followed a series of ever-worsening media reports and claims, including that he’d paid millions of dollars to a former partner to settle allegations of inappropriate behavior.

Ultimately, White’s three-decade tenure at the helm of the freight-software giant he founded unraveled in four tumultuous days.

The crisis finally overwhelmed WiseTech and its figurehead CEO on Thursday after the Australian Financial Review reported a former board member had accused White of intimidation and bullying. The newspaper earlier said White also had a years-long relationship with an employee before gifting her a A$7 million waterfront house in Melbourne. The transaction wasn’t disclosed to the board, the report said.

While the statement announcing White’s departure didn’t address the multiple allegations leveled at the former CEO, WiseTech said law firms Herbert Smith Freehills and Seyfarth Shaw LLP have been hired to assist a board investigation into the claims.

White isn’t leaving the company completely. After taking a short break he will commence a new role focused on product and business development. His new 10-year contract as a consultant comes with a two-year notice period, while his A$1 million annual salary is unchanged.

Cascading Scandals

In a matter of months, accusations of operational or ethical failures have also hit Australia’s two dominant supermarkets, one of the major banks, the largest insurer, the biggest listed media company and Sydney’s main casino.

Another tycoon founder, Mineral Resources Ltd.’s (MIN.AX) Chris Ellison, also this week found himself embroiled in scandal with the company investigating historic undeclared payments that helped him avoid tax. Australia’s corporate watchdog has launched a probe, and almost A$2 billion has been slashed from the miner’s market value since Monday.

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The mining magnate described his actions in a statement on Monday as “a poor decision and a serious lapse of judgment.” He had subsequently “voluntarily” disclosed the matters to the Australian Taxation Office in full, with all outstanding tax, penalties and interest repaid. The company’s board said earlier this week it retained confidence in Ellison.

While executive or corporate transgressions are a worldwide phenomenon, it seems to be particularly pronounced in Australia, where a confluence of factors come into play. Many of the country’s largest industries — aviation, banking, groceries and retailing — are duopolies or oligopolies, comfortable environments that can be conducive for market-power abuse.

Australia is home to only 27 million people and has a relatively small pool of independent board directors to oversee listed companies. Many directors have roles at multiple businesses. Advocacy groups have long said board members are reluctant to speak out when standards lapse at one company for fear of losing a board position at another firm.

That’s not the only problem. Some of the country’s watchdogs are either short of resources, have few corporate scalps to their name, or dish out fines that do little to deter bad behavior. Star Entertainment Group Ltd. (SGR.AX) was this month fined just A$15 million — less than 1% of revenue — by its regulator after an inquiry found the casino operator had breached its license several times and was unfit to run its flagship Sydney complex, despite having had two years to address its problems.

The head of a Senate inquiry into the Australian Securities and Investments Commission, the country’s primary corporate regulator, in July described the agency as “an organization without transparency, few prosecutions, and a litany of cultural, structural and governance issues.”

One of the most damning assessments of an Australian workplace came only last week when Nine Entertainment Co. (NEC.AX), publisher of the Sydney Morning Herald and the AFR, released an independent review of its own practices. The report uncovered systemic abuses of power and authority, bullying, discrimination and sexual harassment.

At too many businesses, internal governance measures aren’t detecting problems before they develop into major public scandals, said Rahat Munir, a professor at Macquarie University’s business school who leads the department of accounting and corporate governance. Australia’s geographical remoteness, far from the world’s major financial and corporate hubs, means its companies risk operating in their own bubble, he said.

“As a result, it’s very, very easy to manipulate the local market,” he said.

WiseTech Woes

In a country with one of the planet’s biggest pension pools, where worker contributions are mandatory, everyday savers are picking up the tab when stock prices decline.

At WiseTech, shareholders who have suffered losses this week include Australia’s sovereign wealth fund, along with its largest pension fund, AustralianSuper Pty. WiseTech shares fell 6.3% Thursday.

“We should all be concerned that these are not isolated examples, but a pattern of behavior that is causing direct losses to shareholders,” said Brendan Lyon, a professor with the University of Wollongong’s faculty of business and law. Corporate regulation is failing, Lyon said.

Former director Christine Holman accused White of “sustained intimidation and bullying” as she quit the board in October 2019 after less than a year, the AFR reported Thursday. The AFR said it wasn’t suggesting White bullied or intimidated Holman, only that she accused him of doing so. Holman declined to comment to the newspaper.

AGL Energy Ltd., where Holman is now a board member, forwarded her an interview request from Bloomberg News earlier this week, which she declined. AGL didn’t reply to a fresh request from Bloomberg on Thursday for comment from Holman on her reported resignation letter from WiseTech.

He last week reached an out-of-court settlement with an another alleged former lover he was pursuing for bankruptcy, the case that first thrust him into the media spotlight. The woman had alleged White expected her to have sex with him in exchange for an investment in her business.

—With assistance from Amy Bainbridge, Ainsley Thomson and Georgina McKay.

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