An investigation should be launched into allegations that an executive of a Malaysian conglomerate was funnelling money to North Korea, said Deputy Home Minister Nur Jazlan Mohamad.

"We cannot allow our financial system to be abused by criminals or rogue nations," he told Malaysiakini.

Reuters today cited a North Korean defector as saying that for the past two decades, North Korean-born Han Hun Il, the founding chief executive of Malaysia Korea Partners (MKP), had been channeling funds to Pyongyang's ruling party.

Nur Jazlan said the allegations could harm national security.

"It can expose us to UN and country sanctions. It can also affect our diplomatic relations with relevant countries on the North Korea issue.

"All affecting our national security and the current cooperation agreements on bilateral or global law and financial enforcement," the deputy minister said.

In the Reuters report, Lee Chol Ho - a trader who previously worked for Han - claimed high-ranking Pyongyang officials traveled to Kuala Lumpur to meet Han yearly.

The officials had allegedly instructed Han to wire money to North Korea via banks in Malaysia.

MKP, which Han founded with a Malaysian partner in 1996, also reportedly owns a subsidiary bank in Pyongyang.

The report said UN sanctions monitors were intensifying scrutiny on both Han and the MKP.

The UN security council had in 2013 prohibited financial services to North Korea due to fears such services could contribute to North Korea's nuclear or ballistic weapons programmes.

Ties between Putrajaya and Pyongyang soured recently after Kim Jong-nam, the half-brother of North Korean leader Kim Jong-un, was assassinated at the Kuala Lumpur International Airport in February.

This led to a standoff in which nine Malaysian diplomats and their families barred from leaving North Korea.

They were however allowed to come back home, after Malaysia gave Pyongyang Jong-nam's body.