HC Surgical says woman's claim that its CEO breached his duties is 'without merit'

Singapore

SERENE Tiong, a shareholder of HC Surgical Specialists (HCSS) and the defendant in a failed defamation lawsuit brought by the group's surgeon Julian Ong, claimed that HCSS chief executive officer and executive director Heah Sieu Min has breached his duties as a director.

This is in relation to the group's acquisition of an additional 19 per cent interest in Dr Ong's private practice late last year, according to an April 30 letter from Ong Ying Ping ESQ, solicitors for Ms Tiong, who holds 100 shares in HCSS.

The medical services group said in a filing late Tuesday night that it had consulted its legal adviser in relation to the claim and is of the view that the allegation is "frivolous" and "without merit".

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 the defamation lawsuit against her, which he lost in early April. District Judge Lynette Yap dismissed his action with costs, finding that Ms Tiong's claims were justified.

HCSS bought a 51 per cent stake in the surgeon's practice, Julian Ong Endoscopy & Surgery (JOES), for S$2.2 million in February 2017. It then bumped up its stake by 19 per cent for S$3.8 million, in a deal which was proposed in September 2019 and completed in October 2019.

Ms Tiong bought 100 HCSS shares in September 2019.

HCSS told the Singapore Exchange (SGX) last month that it was aware of the SMC complaint when it bought the additional interest in JOES, given that Dr Ong informed the company of the complaint on Feb 27, 2019. The management had taken steps in early 2019 to assess Ms Tiong's allegations, continued to monitor Dr Ong's behaviour and looked out for any other complaints or whistleblowing matters, "of which none were noted", the group said in response to SGX's queries.

The company also pointed out that safeguards were built into the JOES sale and purchase agreement, including a put option allowing HCSS to require Dr Ong to repurchase its 70 per cent stake, in the event his employment is terminated.

Shares of Catalist-listed HCSS closed flat at S$0.34 on Wednesday.