SINGAPORE, Dec 13 — A former employee of Japanese beverage company Pokka was sentenced to five weeks’ jail yesterday after he admitted to illegally exporting close to S$1.3 million (RM4.25 million) of the company’s products to North Korea.

Phua Sze Hee, 59, a Singaporean, pleaded guilty to four charges under the Regulation of Imports and Exports Regulations, with 24 other similar charges taken into consideration during sentencing.

Under the regulations, it is an offence for any person in Singapore, or even a citizen outside Singapore, to have any commercial dealings with North Korea.

The prosecution — comprising Deputy Public Prosecutors V Jesudevan, Sarah Thaker and Benedict Teong — told the court that Phua’s offences took place between Nov 29, 2017 and Sept 25, 2018.

Phua had sold various beverages from Pokka — an assortment of fruit-flavoured and coffee-flavoured milk drinks — to several Singapore businesses with the knowledge that the drinks sold would be exported to North Korea for commercial trade.

The businesses, which are generally in the wholesale trade, were:

• Tan Quang Singapore
• Baron & Baron
• A-Linkz Marketing
• 123 Duty Free

During the period of the offences, Phua was the channel manager at Pokka International, a job he had held since 2009 that required him to be involved in the general wholesale, retail trade, sales and distribution of Pokka’s products.

The company also instituted a monthly sales target of S$1,250,000. Phua’s offences helped him to meet this target.

In all, the total value of goods that Phua exported to North Korea was S$1,295,162.53.

He did not earn a commission for these sales.

Phua was laid off by Pokka this year and is now working as a part-time driver.

How it started

The prosecution said that Phua first got involved with North Korea when he was introduced in 2014 to an ambassador in the North Korean Embassy in Singapore, someone called "Kim”, through his customer, Zheng Shi Qiang.

Zheng is the director of Tan Quang Singapore, Baron & Baron, and another business named Beneta. There is no current information on what Beneta does as a business.

On occasion, Kim would liaise with Phua for the Pokka beverages sold to Zheng, and also raise matters to Phua regarding the purchase of Pokka beverages.

When Kim died in early 2015, Zheng then introduced Phua to someone named "Mun” who was working at the North Korean Embassy here.

The prosecution said that Zheng had introduced these men as his business partners to Phua for the purchase of Pokka beverages and that Phua was informed that all beverages sold to Zheng’s companies would be exported to North Korea for sale there.

Around Dec 8 in 2017, Phua sent an invoice to Tan Quang for the purchase of 2,520 cartons of Pokka Strawberry Milk, which were sold for S$32,356.80.

He did the same for Baron & Baron around Jan 17 in 2018 for the purchase of 5,040 cartons of Pokka Premium Milk Coffee Regular, which were sold for S$68,167.35.

Both Tan Quang and Baron & Baron then exported the goods to North Korea via Dalian in China for an export value of S$44,137.55 and S$87,174.36 respectively.

Phua had also learned from the respective directors of A-Linkz Marketing and 123 Duty Free, Tay Kiong Chiak and Ryan Wang Jung Chung, about the demand for Pokka beverages in North Korea.

He sold, through Pokka, 3,463 cartons of its Strawberry Milk and 909 cartons of its Premium Milk Coffee Regular to Wang for S$69,110.43 on May 24 in 2018.

He also sold 2,541 cartons of Pokka Strawberry Milk to Tay indirectly through a third company, Chee Tat Holdings, for S$66,191.23 around Sept 11 in 2018.

A-Linkz Marketing was able to ship the goods to North Korea through Klang in Malaysia, with an export value of S$84,492.32.

123 Duty Free did the same via Dalian for an export value of S$77,044.06.

Phua’s lawyer, Safiuddin Naseem from law firm M&A Law Corporation, sought a jail term of between four and six weeks, saying that his client had dealings with the companies involved in his case before the trade prohibitions with North Korea.

Phua believed that he had the approval of his directors and direct superiors to continue dealing with these companies, the lawyer added.

Phua did not obtain any financial benefit from his dealings with North Korea or any commission for his sales, and was simply acting in his capacity as an employee for the company, Safiuddin added.

The lawyer also pointed out that the total value of goods exported is small, and it formed only about 10 per cent of the monthly sales targets that Phua had to meet.

He thus said that the six to eight weeks’ jail term that the prosecution had sought would be "quite excessive” given the circumstances of the case.

It was not stated in court if either Tay or Wang will be dealt with for their business dealings with North Korea.

What Pokka says

In a statement to the media, Pokka clarified that it has not been charged with any offences, and it is "committed to ensuring that it complies with all national laws and United Nation sanctions”, including ensuring that it has no dealings with North Korea.

The company also said that it has a strict management policy not to trade with distributors that export to North Korea directly or indirectly.

Furthermore, it would immediately suspend business with customers, in and outside Singapore, that are suspected of trading in North Korea, it added.

"The individual convicted is a former employee of Pokka who acted in contradiction of our stated management policy not to trade with distributors that export to North Korea,” it said.

It added that once it became aware that charges had been brought against Phua, it "acted quickly to terminate his employment”.

"We expect all Pokka employees to abide by our management policies and to act lawfully and ethically in all business activities.”

Anyone found guilty of exporting goods to North Korea can be fined up to S$100,000 — or three times the value of the goods in respect of which the offence was committed, whichever is the greater — or jailed up to two years, or both. — TODAY