Former Pokka International CEO fined S$15,000 for not declaring interest in business deals with firm he co-owned

SINGAPORE — The former chief executive officer of Pokka International, Alain Ong Eng Sing, was on Monday (Aug 22) fined S$15,000 after he pleaded guilty to three charges of not disclosing his interest in deals made by the beverage company with a firm that he had partially owned.

The transactions were made between 2010 and 2017, by Pokka Corporation and its wholly owned company Pokka International, while Ong held various positions in both of them.

Throughout the same period, Ong also beneficially owned 40 per cent shares in Asian Story Corporation, a drinks supplier and distributor.

The two Pokka companies entered into three agreements with Asian Story Corporation, but Ong did not disclose his partial ownership of the latter.

With his conviction, the 47-year-old — who is married to Mediacorp actress Vivian Lai — was also disqualified from acting as a director or taking part in the management of a company for a two-year period.

Court documents showed that Asian Story Corporation was incorporated in December 2009.

The shares at the time of incorporation were fully owned by someone named Wang Chia Ye, but there was an agreement to split the beneficial ownership as follows: 30 per cent to Wang, 40 per cent to Ong and 30 per cent to a person named Chin Gim Wah.

Both Chin and Ong did not want to legally own shares because they were employees of Pokka when Asian Story Corporation was incorporated, court documents stated.

Ong maintained a 40 per cent beneficial ownership of Asian Story Corporation even when another shareholder invested in it in 2010.

The following were the agreements that Pokka entered with Asian Story Corporation:

• Feb 15, 2010: Asian Story Corporation and Pokka entered into a distribution agreement, under which Pokka International was appointed as a distributor for the former’s products
• Aug 1, 2016: Asian Story Corporation appointed Pokka Corporation to manufacture the former’s products
• Dec 1, 2017: Asian Story Corporation and Pokka International signed a distribution framework with a third company named Etika, which is a distributor of soft drinks

Defence counsels, Ms Tara Heng and Mr Timothy Tan from law firm Trident Law, submitted to court that Pokka had benefited from the agreements with Asian Story Corporation.

For example, Pokka had in 2009 wanted to pursue a “total beverage company” strategy to reinforce its dominance in certain beverage categories here while penetrating the market for new drinks categories.

However, Ong was instructed by the group CEO of Pokka Corporation to work with a suitable agency brand to produce drinks that it may distribute, so that it may enter into a new product category without devoting resources to develop them from scratch.

After a futile search for other agencies, Ong proposed in 2010 for Asian Story Corporation to be the supplier of the said drinks, and Pokka Corporation’s group CEO agreed to it.

“While it is unfortunate that Alain (Ong) had failed to declare his interest in Asian Story Corporation, it is undeniable that Pokka entering into the distribution agreement had reaped massive, intangible benefits for Pokka,” the defence lawyers argued, highlighting how the company achieved its total beverage company strategy.

They similarly argued that Pokka had benefited from the 2016 and 2017 agreements.

In mitigation, the defence lawyers pleaded that Ong’s “only motivation” was that he wanted the best for Pokka.

They argued that he also did not abuse his positions in the Pokka companies and highlighted his various contributions and achievements in them.

With regard to his beneficial interest in Asian Story Corporation, Ong did not receive any dividends from the firm or voted for any resolution for the company, the lawyers said.

Ong had pleaded guilty and readily cooperated with the authorities from the beginning, demonstrating his remorse, they added.

Deputy Public Prosecutors Suhas Malhotra and David Koh, however, submitted that Ong had received a sum of S$9.6 million in 2018 when Kimly Ltd purchased Asian Story Corporation. Ong returned the sum later on after Kimly rescinded its purchase.

For each offence under Section 156 of the Companies Act, Ong could have been jailed up to 12 months or fined up to S$5,000.