In a High Court ruling on Monday, judge George Wei awarded S$4.03m (£2.3m, $2.95m, €2.5m) in damages to Ramesh Krishnan after Axa Life Singapore provided “incomplete, misleading and unfair” references that stopped him for getting another job.
Having initially lost a defamation and negligence suit against Axa in 2012, Krishnan won an appeal in July 2016.
Despite initially seeking damages of S$63m for lost compensation and aggravated damages, the judge based the award on the loss of earning Krishnan would have received if he had gotten the job with Prudential.
Axa had asked that a nominal S$1 be awarded.
Employment history
According to court records, Krishnan was an adviser and agent of Axa Life Singapore between 2005 and 2011, during which time he was promoted twice and won numerous awards and accolades.
In 2007, Krishnan started leading a group of advisers under his own agency organisation known as the Ramesh Organisation. As of April 2011, he had 47 advisers under his supervision.
His relationship with the company started to deteriorate in late 2010, around the same time a new chief executive office, Glenn Williams, was appointed.
On 29 April 2011, Krishnan was served with a letter of termination, but requested to resign instead. His resignation was accepted by Williams and he left the company that day.
Soon after Krishnan applied to join Prudential Singapore.
Reference checks
Before making an offer of employment, Prudential sought references for Krishnan to ensure that he was a “fit and proper person”.
In its letter sent to Prudential on 7 June 2011, Axa suggested that the Ramesh Organisation had a low persistency ratio, which is used as an indicator of the quality of an adviser’s sales. A high ratio indicates that clients have continued to maintain their policies during the life of the product.
Axa also said that, between 2008 and 2011, 14 Ramesh Organisation advisers, including Krishnan, had been investigated for “compliance issues”.
It added that disciplinary action was taken against five advisers and that three cases had been referred to the police for further investigations.
In court on Monday, judge Wei said that these claims had not been substantiated.
After receiving the reference, Prudential contacted Axa seeking further information and was told that Krishnan had been investigated for unprofessional conduct but that no action was taken because the evidence was inconclusive.
Axa declined, however, to provide any more information about the 14 Ramesh Organisation advisers who had also reportedly been investigated.
Prudential made Krishnan a conditional offer of employment on 16 June 2011 but continued to seek clarification from Axa about the specifics of the reference it had provided.
The French insurer too a long time to respond and its eventual reply did not address Prudential’s questions.
Mas involvement
Despite this, on 12 August 2011, Prudential applied to Mas for a representative notification framework (RNF) licence, which is a requirement before someone can be appointed by a firm to carry out regulated activities.
On 14 October 2011, Williams sent a letter to Prudential’s chief executive, copying in Mas, highlighting the Ramesh Organisations “very poor” persistency ratio and alluded to possible ethical violations by its advisers.
These claims by Williams were reiterated to Mas when the regulator contacted Axa seeking more information about Krishnan.
Having been informed by Mas that it would only issue a conditional RNF licence to Krishnan because of “several issues of concern” over his working relationship with Axa, Prudential withdrew its RNF licence application in mid-December and decided not to hire Krishnan.
Another closed door
In January 2012, Krishnan applied to Tokio Marine as a financial adviser, a significant step down from his previous role at Axa.
Again, he was unsuccessful after Tokio Marine applied to Axa for a reference.
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