HC Surgical raised stake in surgeon's practice despite SMC complaint

Singapore

THE board of HC Surgical Specialists (HCSS) said it was aware a complaint had been filed against surgeon Julian Ong when it forked out S$3.8 million to acquire an additional 19 per cent stake in his private practice, Julian Ong Endoscopy & Surgery (JOES), late last year.

A woman had lodged a complaint against Dr Ong, whose endoscopy clinic is 70 per cent-owned by HCSS, with the Singapore Medical Council (SMC) in June 2018. She claimed that Dr Ong and another specialist - who is not part of the HCSS group - had colluded to have sex with "vulnerable" female patients, after she saw WhatsApp messages between the two men.

The woman also forwarded the complaint to other doctors, prompting Dr Ong to file a defamation lawsuit against her. He lost the suit in early April this year.

On Friday, in response to the Singapore Exchange's (SGX) queries, HCSS said Dr Ong informed the company of the SMC complaint on Feb 27, 2019. The management took steps to assess the allegations in early 2019, continued to monitor his behaviour and looked out for any other complaints or whistleblowing matters, "of which none were noted".

In mitigation, HC Surgical said safeguards were built into the sale and purchase agreement giving it the option to require the seller - Julian Ong Surgery - to repurchase HCSS' shareholdings in JOES in the event Dr Ong's employment is terminated.

Dr Ong's service agreement allows HCSS to terminate his employment under certain circumstances - such as Dr Ong being guilty of dishonesty or serious or persistent misconduct, or if he is struck off the register of doctors.

HCSS first took a 51 per cent interest in JOES for S$2.2 million in February 2017, before raising its stake by 19 per cent in October 2019. It announced last September that it plans to buy the remaining 30 per cent stake in the clinic by Oct 31, 2021.

On Friday, HCSS also explained that in early 2019 it believed it would be "impractical" to further investigate Dr Ong before the SMC provided its findings.

Dr Ong had told the firm the accusations were untrue and one-sided statements made by an unrelated third party who was not his patient.

He had "wanted to keep matters relating to the suit private as it related to defamatory statements", HCSS explained. Also, no complaints were filed by any of his patients, nor were issues raised by employees.

For the half year ended Nov 30, 2019, JOES contributed 17 per cent of HCSS's revenue and 13 per cent of profits after adjusting for certain items.

HCSS said there has been no immediate financial impact since the lawsuit concluded.

As the SMC is looking into the complaint, HCSS' board will allow due process to "run its course". If the medical watchdog takes adverse action against Dr Ong, and depending on the severity, timing and duration of the action, the group will "make the necessary assessment and reallocate resources to its other specialists".

HCSS shares fell 6.3 per cent or 2.5 Singapore cents to close at 37 cents on Friday, after the announcement.