Court upheld the firing but blocked $183,000 bonus forfeiture
A Singapore CEO was sacked without notice after a $10,000 work-trip advance unravelled into allegations of misappropriating more than half a million dollars.
The Singapore High Court delivered its decision on 6 January 2026, ruling largely in favour of the employer in a dispute that started with a single cash advance and spiralled into allegations of misappropriated funds totalling more than half a million dollars.
The case involved Kanan Packrisamy, who joined Herbal Pharm Pte Ltd on 19 March 2018 as Chief Operating Officer and later rose to become CEO of HP and Herbal Pharm+ Asia Pacific LLP with effect from 24 November 2022. He was also overall-in-charge of finance, with authority to approve payments from the HP Entities' bank accounts of up to $30,000 per transaction.
Mr Vejaiyan, the sole director and shareholder of HP and the manager and principal partner of the related LLPs in the group, is described in the judgment as the controlling mind behind the HP Entities.
Things began to unwind in early December 2023, when Mr Vejaiyan asked Mr Kanan to account for a $10,000 cash advance he had drawn in May 2023 for a work trip to Africa. Mr Kanan had prepared and approved a payment voucher for $10,000 and then accessed the UOB platform and transferred $10,000 from the account of Herbal Pharm Organics LLP to his personal bank account.
The employer's position was that Mr Kanan never obtained prior approval and could not properly account for the money on his return. Mr Kanan said the advance was a simple misunderstanding and that he had verbal approval. The court did not accept his version.
Justice Audrey Lim found that Mr Kanan "deliberately failed to account for the $10,000 Advance after he returned from the Africa Trip and only sought to do so when he was confronted, in December 2023. He then made up an untrue account of how he had spent the entire sum for the purposes of the Africa Trip."
The judge placed weight on a similar 2022 cash advance Mr Kanan had taken for a Dubai trip, finding his subsequent justifications for that earlier advance equally dubious.
On 8 December 2023, Mr Kanan was handed a letter dated 7 December 2023 demoting him from CEO to Senior Vice President of Finance and reducing his total monthly salary to $8,000. On 11 December 2023, he was dismissed without notice. The employer then commenced an independent forensic accounting investigation and counterclaimed for $502,369.56 across 49 transactions, grouped into four categories.
The court agreed that the summary dismissal was lawful. Mr Kanan's conduct, the judge found, destroyed the trust required of someone in his role. "Such misconduct destroys the relationship of trust and confidence underlying the contract of employment between the employee and the employer, rendering the employment relationship untenable."
The judge also confirmed that an employer can rely on the misconduct of its employee, discovered after the employee's dismissal, as a defence to a wrongful dismissal claim. On the question of whether the company should have held a formal inquiry before firing him, the court said there is no general legal duty to do so unless the contract expressly requires it. The judge also rejected an argument based on Ministry of Manpower guidelines, noting that Mr Kanan had not pleaded the existence of any implied contractual obligation arising from those guidelines, and that the guidelines themselves were not shown to have the force of law or to override the express contractual term permitting immediate dismissal without notice.
But the employer did not win on every front. The court ruled that the company could not unilaterally cut Mr Kanan's salary through the demotion letter, finding the contract's unilateral variation wording was not sufficiently clear to permit a reduction in a fundamental term such as remuneration. Mr Kanan's signature on the demotion letter, the judge said, was an acknowledgement of receipt, not acceptance.
The judge also refused to allow the employer to forfeit $183,510 in already-earned growth incentive bonus, ruling there was no clause in the HP Contract permitting forfeiture on termination. HP and HP+ were each ordered to pay Mr Kanan $2,000 in unpaid December 2023 salary up to the date of termination.
On the counterclaim, the court found Mr Kanan had misappropriated funds and converted them for his use, in breach of his employment contracts with HP and HP+, his duties as HP's director under s 157(1) of the Companies Act 1967, and his fiduciary duties to the HP Entities across three of the four categories. He was ordered to pay sums totalling approximately $476,000 to six group entities, to Mr Vejaiyan personally ($105,492), and to a sole proprietor trading as Herbal Products. The largest entity award was $100,499.35 to Herbal Pharms Telelink LLP. One category, a $26,000 cash withdrawal in June 2022, was dismissed for lack of evidence that Mr Kanan ever received the money. Mr Kanan's separate claim that he was also employed by another group entity, Herbal Pharms Direct LLP, was rejected.
The ruling is a reminder that summary dismissal can hold up where trust is genuinely broken, but contract drafting still does the heavy lifting. Generic variation clauses will not support a unilateral pay cut, and earned bonuses cannot be clawed back without an express forfeiture clause, even where misconduct is proven.
