POKKA sues ex-CEO Alain Ong for alleged conspiracy causing SG$10m in losses

Beverage company POKKA is reportedly suing Alain Ong, former deputy group CEO of POKKA Singapore and CEO of POKKA International, for SG$10 million in losses. The company alleged that Ong is part of a conspiracy behind the IPO of coffee shop operator Kimly, which had later acquired rival beverage brand Asian Story, according to court documents seen by multiple media such as ST and TNP. POKKA’s filing also said Ong also became a non-executive and non-independent director of Kimly in February 2017, a month before it was listed on Singapore’s stock exchange. His involvement with Kimly and Asian Story, according to POKKA, was not fully disclosed.

The company laid off Ong, who is the husband of actress and ex-POKKA ambassador Vivian Lai, in September 2018 after internal investigations. Not long after, in the lawsuit filed in July 2019, POKKA said he has breached his duties as a director and employee. This includes a “concerted scheme” to divert POKKA’s business to Asian Story and inflate its value ahead of its acquisition by Kimly, said the news reports.

According to reports, POKKA entered into a manufacturing agreement with Asian Story in August 2016 to develop recipes and manufacture Asian drinks on Asian Story’s behalf on Ong’s advice. However, POKKA claims that Asian Story never had any manufacturing or distribution capabilities and appeared to have one employee. It added that the move was intended to rely on the POKKA brand to promote the Asian Story’s drinks.

Other faults brought up in the filing include preferential trade deals, incentives for POKKA International employees to sell Asian Story’s products, as well as “significant advertising and promotional expenses” by POKKA for the benefit of Asian Story, and attempts to divert corporate opportunities, said the reports. In total, POKKA claims these acts have allegedly led to SG$7 million in losses.

In defence, Ong argued that his actions are meant to help POKKA venture outside of its core beverages. Meanwhile, the decision to sign on Asian Story as an agency brand was intended to beat competitor Yeo Hiap Seng and the move was approved by the board and management.

Other claims by POKKA include the fact that Monarch Beverage Company terminated an agreement with POKKA for it to produce, sell and distribute beverages such as Kickapoo. This, they claimed, is also an effort by conspirators to divert the business to Asian Story from POKKA. This allegedly resulted in a loss of SG$3.7 million by POKKA.

This comes after POKKA was thrown in the spotlight in August for allegedly exporting products illegally to North Korea. The company had said that it was unaware of such dealings and are cooperating fully with the authorities in relation to their ongoing investigations into matters that took place prior to 19 September 2018, when Rieko Shofu took over from Ong as CEO of POKKA International.