SGX RegCo queries HC Surgical Specialists

THE Singapore Exchange Regulation (SGX RegCo) has queried HC Surgical Specialists (HCSS) on recent announcements made in relation to Julian Ong, including whether the board has put in place adequate and effective controls to safeguard the interest of the company and shareholders.

In June 2018, a woman lodged a complaint against Dr Ong, whose endoscopy clinic is 70 per cent owned by HCSS, claiming that Dr Ong and another specialist - who is not part of the HCSS group - had colluded to have sex with "vulnerable" female patients. The woman also forwarded the complaint to other doctors, prompting Dr Ong to file a defamation lawsuit against her. However, he lost the suit last month.

In a filing on Friday, SGX RegCo - which undertakes regulatory functions on behalf of SGX - noted that the Singapore Medical Council (SMC) had informed Dr Ong of the complaint lodged against him on Feb 27, 2019 and queried whether Dr Ong had just been informed of the complaint or was told that the SMC was investigating the complaint. SGX RegCo then asked HCSS to clarify whether SMC had requested for information or sought Dr Ong's assistance on the complaint/investigation following that.

In October last year, HCSS boosted its stake in Julian Ong Endoscopy & Surgery (JOES) from 51 per cent to 70 per cent, paying nearly S$3.8 million for the additional 19 per cent stake. The sale and purchase agreement (SPA) for the 19 per cent stake acquisition included a put option that required Dr Ong to repurchase 70 per cent of the shares in JOES should his employment with the group be terminated. 

HCSS was asked for the terms of the put option, including the consideration that would be received by HCSS should it be exercised.

In addition, SGX RegCo requested for the terms in the service agreement with regards to the termination of Dr Ong's employment, the circumstances under which the put option can be exercised by HCSS as well as whether there are provisions for the exercise period for the put option to be extended. Presently, the put option is exercisable within the 30th to 48th month of Dr Ong's employment with the group, with the 48th month being March 2021.

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In entering into the SPA to acquire a further 19 per cent in JOES, HCSS was asked whether the board considered the possibility that the SMC investigations could impact Dr Ong's ability to continue practising medicine in the event of a prolonged suspension or removal of his licence.

Other queries include whether HC Surgical's board fully considered if the company's 70 per cent stake in JOES is safeguarded, and if there are plans to acquire the remaining 30 per cent in JOES at a later stage.

SGX RegCo also asked HC Surgical to assess the controls, processes and procedures put in place to safeguard the interest of the company as well as to address the potential risks. As it currently stands, the Parkway Group has suspended Dr Ong's accreditation and clinical privileges at Gleneagles, Mount Elizabeth, Mount Elizabeth Novena and Parkway East Hospital since April 20 this year until the SMC dismisses the complaint against Dr Ong. Dr Ong continues to practise from HC Surgical's heartland clinics and use facilities at an alternative hospital for inpatients, where needed.

Meanwhile, HCSS board requires Dr Ong to inform all his patients of the matters in the SMC complaint prior to any consultation and obtain the consent of each patient to act as their physician.

Finally, SGXRegCo asked for confirmation from the board that it has taken all steps and carefully examined all options available to the group to make sure all decisions were made and actions were taken in the best interest of the company and its shareholders; and to confirm that the board has put in place "adequate and effective controls" to safeguard the interest of the company and shareholders.

Shares in HCSS closed one Singapore cent lower at 35 Singapore cents on Thursday.