A North Korean guard tower, next to dilapidated houses, guards the border near the North Korean city Sinuiju, across the Yalu River from Dandong, China's largest border city with North Korea. South Korean workers expelled from Kaesong said the fate of North Korean factory workers is unclear. Many of them depended on the factory for basic needs, including running water. File Photo by Stephen Shaver/UPI | License Photo

SEOUL, Feb. 12 (UPI) -- South Korea said Friday it has evidence that funds from a jointly operated factory in North Korea were used to fund Pyongyang's nuclear weapons program, as South Korean businessmen continue to denounce their government for suspending operations at Kaesong.

Seoul's Unification Minister Hong Yong-pyo said the government has classified documents showing factory revenue was being allocated in North Korea to financing its universally condemned nuclear weapons and ballistic missile program, South Korean television network JTBC reported.


Opposition party lawmaker Lee Jong-geol criticized the move, saying the administration has shown no evidence for its claims.

"No proof has been submitted that a project earning more than $80 million in profits has been used exclusively for nuclear and missile development in North Korea," Lee said.

The South Korean Kaesong Industrial Complex Business Association held an emergency meeting Friday and said the government had made an unfair decision when it shut down operations, local news network YTN reported.

The association urged the government to compensate businesses for their losses after North Korea decided to freeze all assets at the factories.

The frozen assets include $852 million of South Korean investments into factories and facilities such as roads.

Kaesong was a government-initiated project that began in 2004 under then-President Roh Moo-hyun, and until last week was the manufacturing center for more than 120 businesses specializing in machineries, electronics and apparel.

Private business investments constituted more than half of total investment.

Some South Korean workers who spoke to local paper Donga Ilbo said they worried about the North Koreans who worked in the factories and the residents of Kaesong, the adjacent North Korean city.

One South Korean woman, Kim Su-hui, who worked as a nurse in a factory clinic, said she often saw North Korean workers bringing their laundry to the premises because of the availability of running water on site. She said that was how she knew tap water was being partly supplied to local residents from the Kaesong Industrial Complex.

South Korea cut off electricity and water after the abrupt departure of its citizens.