Top executive hit with lawsuit for downloading company files on eve of resignation, High Court slams ‘breach of confidentiality’

SINGAPORE: A former senior executive at Hayate Partners Pte Ltd, a Singapore-based fund management company, is embroiled in a legal battle after allegedly downloading and retaining sensitive company documents before his resignation.

According to the latest report from HRD Asia, Rajan Sunil Kumar, who served as the Head of Investor Relations from December 2019 until his departure in December 2021, is accused by his former employer of violating confidentiality agreements and company policies by downloading thousands of confidential files from the company’s Google Drive.

Allegations of data breach surface after exit

Hayate Partners took legal action after discovering that Kumar had downloaded over 6,200 files from the company’s Google Drive, including a significant number on the eve of his resignation. An internal audit revealed that Kumar accessed 4,533 files on December 8, 2021, just before he tendered his resignation. The audit also uncovered that Kumar continued to download files and even retrieved an entire Skype chat log after his resignation, including on December 20 and 21, shortly before his final day at the company.

Nature of the sensitive information accessed

According to Hayate Partners, the documents Kumar accessed spanned several critical areas of the company’s operations. These included confidential investment strategies, client materials, business development documents, and legal and regulatory advice. The company emphasised that the files contained highly sensitive information, ranging from details of past investment successes and failures to clients’ personal and financial data.

Hayate argues that Kumar’s actions not only violated his employment contract but also breached his legal duty to maintain confidentiality, a cornerstone of trust in corporate relationships.

Kumar’s defence – a matter of unpaid pay slips

In his defence, Kumar denied any wrongdoing, asserting that the downloads were not intended for malicious purposes. He claimed that he only downloaded the files to search for missing pay slips that he had not received during his tenure. Regarding the December 20 downloads, Kumar explained that he was merely preparing for a smooth transition upon his departure. He also defended the download of his Skype chat logs as evidence for potential complaints related to the non-provision of pay slips and the events leading up to his resignation.

However, the court was not convinced by his defence and found that his actions exceeded the scope of legitimate concerns over pay slips.

Court rules in favour of Hayate Partners

The Singapore High Court ultimately sided with Hayate Partners, ruling that Kumar had breached both his contractual obligations and his duty of confidentiality under equity law. The court concluded that it was more likely than not that Kumar had retained confidential documents beyond the termination of his employment. The court also rejected Kumar’s defence, ruling that his actions were not in good faith and that he had failed to explain adequately why he retained the documents after his resignation.

As part of the ruling, the court ordered the deletion of cached files on Kumar’s devices, which were linked to the downloads made on December 8. The deletion will be supervised by Hayate Partners’ forensic experts to ensure that no confidential information is misused or disclosed.

This case highlights the growing importance of data security and confidentiality, particularly in the financial sector, where sensitive client and business information is often a prime target for misuse. It also underscores the risks involved when employees retain access to company information after their employment ends.