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Court dismisses HC Surgical shareholder's application to sue CEO
MINORITY shareholder Serene Tiong will not be able to sue HC Surgical Specialists’ (HCSS) chief executive officer Heah Sieu Min for what she had alleged as a breach of his duties when the company raised its stake in Julian Ong’s practice.
The Singapore High Court on Thursday dismissed in full the application by Ms Tiong, who held 100 shares in HCSS as at April 30, to bring a legal action in the name and on behalf of the medical services group.
The court also ordered her to pay costs of S$10,000 plus “reasonable disbursements” each to the company and Dr Heah, HCSS said in a bourse filing late Thursday night citing its legal counsel WongPartnership.
In May this year, Ms Tiong alleged that Dr Heah, who is also executive director, had breached his duties as a director of the company in relation to HCSS’s acquisition of an additional interest in Julian Ong Endoscopy & Surgery around September 2019.
She then applied to the court under Section 216A(2) of the Companies Act to sue the company in respect of this allegation, while HCSS set up a litigation committee.
On Thursday, HCSS said the High Court found that the company’s decision to acquire an additional interest in Dr Ong’s clinic was made by the board of directors “on commercial grounds, in good faith and in the company’s interest”.
Further, the court found that Ms Tiong did not show “a legitimate and arguable case” in respect of her allegation and did not bring her application in good faith, HCSS added.
Dr Heah said: “The allegations that were the subject of Ms Tiong’s court application were made against me personally and I have had to defend myself against them.
“The decision to acquire an additional interest in Julian Ong Endoscopy & Surgery was one that was made with the approval of the full board and always with the interests of the company and its stakeholders in mind.”
Meanwhile, the company reiterated its view that any personal disputes between Ms Tiong and Dr Ong “should be resolved in the appropriate forum”, without involving HCSS.
In June 2018, Ms Tiong lodged a complaint with the Singapore Medical Council (SMC) against Dr Ong, claiming that he and another specialist colluded to have sex with “vulnerable” female patients. She then forwarded the SMC complaint to other doctors, prompting Dr Ong to file a defamation lawsuit against her, which he lost in early April.
The SMC complaint progressed to a disciplinary tribunal this May. Dr Ong's registration as a medical practitioner was also made conditional for 18 months from June 18, 2020, or until the conclusion of an inquiry or proceedings against him, whichever is sooner.
HCSS bought a 51 per cent stake in Dr Ong’s practice for S$2.2 million in February 2017, before bumping up its stake by 19 per cent for S$3.8 million, in a deal proposed in September 2019 and completed in October 2019. Ms Tiong bought her 100 HCSS shares in September 2019.
The Catalist-listed stock was trading flat at S$0.33 as at 10.33am on Friday.