SGX has faced many delistings in recent years—and 2024 is no exception. It almost seems like companies are rushing to delist before the SGX task force rolls out more supportive reforms. Why? Beats me.
But now and then, a delisting surfaces that just draws the ire of investors. Singapore Paincare Holdings is one such case.
The CEO and COO—Dr Bernard Lee and Jeffrey Loh—have made an offer to privatize the company at $0.16 per share.
If you recall, Paincare only listed around five years ago, at an IPO price of $0.22. And now, it’s asking shareholders to exit at a loss.
Even after adding up total dividends of $0.03, investors will only get $0.19 per share—still a 14% loss after five years. That’s not just disappointing—it leaves a sour taste in the mouths of long-term shareholders.
Textbook Excuses for Delisting
The rationale given? Paincare claims the offer allows shareholders to exit at a premium to historical trading prices.
But if you pull up the chart, you’ll see that the stock traded around its IPO price for years, before tanking more than 50% since mid-2023. The timing of the offer? Convenient. It looks opportunistic—not generous.
They also say they don’t need to raise capital and that listing involves ongoing costs. Those are standard lines, and frankly, quite tired ones.
Paincare raised just S$2.5 million for business expansion during IPO—likely meant for acquisitions.
Medical service businesses like this grow by acquiring doctors and clinics. That’s exactly what they did:
- 2020: 40% of KCS Anaesthesia Services – S$2.4M
- 2021: 51% of Binjai Medical, 100% of CS Yoong Anaesthesiology, 60% of Kovan Medical, Medihealth Bishan – S$585k
- 2022: 51% of Centre for Screening & Surgery – S$3.26M
- 2023: PTL Spine & Orthopaedics – S$3.12M; Puxiang Healthcare (China JV) – S$7.6M; Boon Lay Clinic – S$1M
- 2024: S$1.5M invested in digital and AI transformation
The problem? These far exceed the S$2.5M raised at IPO. And there was no new equity issuance. In fact, the company bought back shares, reducing the outstanding float.
So what funded the growth? You guessed it—debt.
Debt-Fueled Growth, Profit-Lagging Model
Revenue grew at a 5-year CAGR of 47%. Impressive. But debt also ballooned, with a 5-year CAGR of 42%.
Meanwhile, profits didn’t grow as fast. Interest costs rose, especially in a higher rate environment.
And then there’s the most glaring part:
Key Management Took Most of the Profit
In FY2021, CEO Bernard and COO Jeffrey were both paid below S$750k.
In FY2024, their pay rose to a combined S$1.804 million
That’s 92% of FY2024’s net profit of S$1.965 million.
Think about it: two of them shared S$1.804 million, the shareholders shared S$1.965 million, and they now want to buy it back from public shareholders—at a discount to IPO price.
Other Red Flags
In 2021, a doctor from Paincare’s associate Sen Med was charged for improper codeine dispensing and poor record keeping. Paincare wrote off the investment in FY2023.
In 2024, a tenancy dispute surfaced involving Paincare’s Novena clinic, rented from a company owned by the CEO. He even sent a letter of demand to Paincare, seeking higher rent. Eventually, they agreed to pay the increased rate.
These don’t reflect well on corporate governance—or shareholder fairness.
IPO Was Supposed to Share Risk & Reward
Let’s be clear: there’s nothing wrong with paying yourself fairly, or even taking the company private if the market undervalues it.
But the spirit of an IPO is to share the risk—and the upside. What we see here is:
- Risk shared with public shareholders
- Rewards disproportionately taken by insiders
That’s not shared prosperity. That’s extraction.
The Deal Isn’t Done Yet
Shareholders will vote on the deal under a Scheme of Arrangement.
The Offerors (CEO and COO) will abstain. But Sian Chay and Dr Jitendra—owning 26.4% combined—have said they will vote for the deal.
That gives the insiders a leg up.
The scheme will only go through if at least 75% of the share value and more than 50% of the shareholders (by number) voting at the meeting support it.
If you feel this is unfair, don’t stay silent. Turn up. Vote. Make them offer a fair price—or not at all.
Disclosure: I have no position in Singapore Paincare Holdings at the time of writing. This article reflects my personal opinion and does not constitute financial advice.
There is another delisting attempt coming up, Plato capital