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North Korean Ri Jong Chol is seen in this undated handout released by the Royal Malaysia Police to Reuters on February 19, 2017. Royal Malaysia Police/Handout via Reuters

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By Tom Allard and Liz Lee

KUALA LUMPUR (Reuters) - Ri Jong Chol, a North Korean arrested in the probe into last week's murder of the half-brother of the isolated state's leader, lived in Malaysia for more than three years without working at the company registered on his employment permit or receiving a salary.

Ri, 47, had a Malaysian work visa that showed he was an employee of Tombo Enterprise. But the owner of the company said he never worked a day there or drew a salary from the small herbal medicine firm.

Chong Ah Kow said he facilitated Ri's working visa by stating in supporting documents that he was a product development manager in the company's IT department earning 5,500 ringgit (£994.2) per month. The visa was renewed once, he said, in June 2016.

"It was just a formality, just documents, I never paid him," Chong, a Malaysian, said in an interview. "I don't know how he survives here. I don’t know how he gets money."

Chong, a frequent traveller to North Korea, said he was just trying to "help out" Ri. He has been interviewed by police and told Reuters he was ready to face any consequences from submitting false information to the government.

Chong, who has remained friends with Ri, said the North Korean lived with his wife and two children in Kuala Lumpur.

Reuters could not ascertain if Ri had any other employment or source of income. Police could not be reached for comment to explain how Ri supported his family in Malaysia.

HELP UNIVERSITY

Ri has been arrested as a key suspect in the murder of Kim Jong Nam, the half-brother of North Korea’s leader Kim Jong Un. Police have not specified what role he may have played in last week's brazen killing at the Kuala Lumpur International Airport.

Reuters was unable to find out whether Ri has a lawyer or to contact his wife or his daughter. Efforts to contact the North Korean embassy in Kuala Lumpur were also unsuccessful.

Chong said Ri rented an apartment in Kuchai Lama, a middle-class Kuala Lumpur suburb. Three-bedroom apartments in the neighbourhood typically rent for about 1,500-2,000 ringgit per month, according to property websites.

Ri's daughter studies at HELP University, a fee-paying private college in a western Kuala Lumpur suburb that bestowed a honorary doctorate in economics on Kim Jong Un in 2013 for his "untiring efforts for the education of the country and the well-being of the people".

The university has confirmed she is a student there.

Chong said he and Ri met in 2013 when the North Korean came to him in Kuala Lumpur, and said he was related to the inventor of a mushroom extract with anti-cancer effects. Chong said he has visited North Korea about 10 times and admires the country for its culture.

"They have great shows," Chong said. "(Ri was a) soft-spoken, courteous, humble man - just like other North Koreans."

EASY ENTRY

Ri met Chong infrequently, driving with his daughter to Chong's office in Kuala Lumpur. The men discussed business opportunities, such as palm oil importation, with Ri's daughter translating from Korean into English and vice versa. Nothing, however, came from the talks, Chong said.

The duo last met in January.

Malaysia is about the only foreign country that a North Korean can easily enter, thanks to a visa-free policy for visitors that is largely reciprocated by Pyongyang. Since the 1980s, North Korea has used the Southeast Asian nation as a hub to promote its strategic and business interests, legitimate and otherwise, some analysts say.

However ties are under strain following the killing of Kim Jong Nam.

Kim died last week after being assaulted at the airport with what police believe was a fast-acting poison. The two women who assaulted him, one who is Indonesian and another who carried a Vietnamese passport, are both in custody.

Police have said they are also seeking four other North Koreans who fled the country on the day Kim was murdered.

South Korean and U.S. officials believe Kim was killed by agents from the North, possibly on orders from his half-brother because he had spoken out publicly about his family's dynastic control of the nuclear-armed nation.

Malaysia has not gone that far, but it has been annoyed by Pyongyang's suggestions that its police are acting at the behest of South Korea.

COSY TIES

North Korea and Malaysia have had a cosy relationship since former prime minister Mahathir Mohamad embraced the isolated state, in part to rebuff the United States.

However, two-way trade between the two nations was worth only 23 million ringgit in 2015.

Even so, Malaysia's Proton cars have been sold to North Korea and used as taxis in Pyongyang. North Korean miners work in Malaysia's Sarawak province while Malaysian palm oil and rubber is exported to the communist state.

Last year, the chief executive of the Malaysia External Trade Development Corp, Dzulkifli Mahmud, spoke of North Korea "using Malaysia as a gateway to Southeast Asian markets as it finds the country business-friendly with pro-business policies."

James Chin, the director of the Asia Institute at Australia’s University of Tasmania, said the trade figures do not include substantial illicit economic activity, much of it directed through the North Korean embassy and front companies.

"Malaysia is the source of a lot of smuggling operations by North Korea to raise money for the motherland," he said. "They also buy a lot of high-end consumer goods in Malaysia for the elite in Pyongyang."

(Reporting by Liz Lee and Tom Allard; Editing by Raju Gopalakrishnan and Bill Tarrant)

Reuters