Later that year he established the Kokang People's Revolutionary Army and began leading a small group of youth in guerilla warfare against the Myanmar Armed Forces.

[2][8][9] The central government and narcotics experts, however, still suspect the region of being involved in the drug trade.

[12][13][14] The confrontation with junta troops eventually led to violent conflict (the Kokang incident); Pheung himself was driven out by his competitors from within the army[14] and is rumored to have fled,[2] after a warrant was issued for his arrest.

Armed clashes erupted in February 2015 between his troops and the Myanmar Army, with initial heavy casualties on the Burmese side.

[15] Pheung was known to have close ties to Asia World's Lo Hsing Han, a former opium kingpin, and his son Steven Law (Tun Myint Naing), and was believed to have investments in Singapore through them.