KUALA LUMPUR (REUTERS) - Malaysia should investigate the possible transfer of funds to North Korea's leadership, the deputy home minister said on Tuesday (April 11), after Reuters reported that the head of a Malaysian conglomerate had for years funnelled cash to Pyongyang.

Reuters on Monday cited a North Korean defector as saying that Han Hun Il, the North Korean founding chief executive of Malaysia Korea Partners (MKP), had transferred money to Pyongyang's leadership, the central committee of the ruling Workers' Party, for the past two decades.

MKP's bank subsidiary in Pyongyang is also under investigation by the United Nations for possible violations of sanctions barring foreign companies from setting up joint ventures with, or taking an ownership interest in, North Korean banks.

The reports risk damaging Kuala Lumpur's reputation as a financial centre, deputy home minister Nur Jazlan Mohamed told Reuters, and called on the central bank to investigate if there had been any misuse of the country's banking systems.

"We have to investigate if, among other things, North Korea was using the friendship with Malaysia as a conduit for illicit activities," he said.

The central bank did not immediately respond to Reuters'request for comments.

Malaysian police should conduct their own investigation into MKP and Han to determine if any crime had been committed, Nur Jazlan added.

Last month, police chief Khalid Abu Bakar said authorities would assist the UN in its investigation into MKP.

In February, Reuters reported that North Korea's spy agency was running an arms export operation out of Malaysia.

Close ties between Malaysia and North Korea have come under scrutiny following the assassination of Kim Jong Nam, the estranged elder half-brother of North Korea's ruler, with the highly toxic VX nerve agent on Feb 13 in the Malaysian capital of Kuala Lumpur.