SEOUL (BLOOMBERG) – South Korea’s top prosecutor has ordered an investigation into financial fraud allegations made against a support group for women who were forced to work in colonial-era Japanese military brothels, a local newspaper reported.

Prosecutor General Yoon Seok-youl ordered the investigation on Tuesday (May 26) of the Korean Council for Justice and Remembrance, which has been accused of accounting fraud and embezzlement, JoongAng Daily reported, without elaborating on how it had obtained the information.

The probe came a day after a 92-year-old survivor accused the group, once led by a newly elected South Korean lawmaker, of raising funds to enrich itself and did little to help women who were forced into sexual servitude during World War II.

The prosecutor general’s office declined a request to comment on the report.

The Korean Council for Justice and Remembrance said on its webpage that prosecutors searched its office last week and that it is cooperating with the investigation. It also said it may have omitted some donations in its public filings, but denied most of the allegations regarding its accounting and spending of the funds.

Yonhap News Agency reported on Wednesday that President Moon Jae-in’s ruling Democratic Party wants Ms Yoon Mee-hyang, recently elected to Parliament as a ruling party member, to address the allegations made against the group that she once led.

The group has been a prominent voice for what it calls the “military sexual slavery issue”, which has been a flash point for tensions between South Korea and Japan. A ruling party spokesman said that it will clarify its position after “checking relevant facts”.

Ms Yoon has denied the allegations. She is due to be inaugurated in a new Parliament that starts on Saturday in a seat awarded to the ruling Democratic Party for proportional representation. If she steps down, the seat could be given to another member, potentially minimising damage to Mr Moon and his party.

Mr Moon, a former human rights lawyer who once represented Koreans conscripted into work for Japanese wartime factories and mines, has pressed Tokyo over the harm it did during its 1910-1945 colonial rule over the Korean Peninsula.

The investigation could dent support for the campaign on behalf of what are euphemistically known as “comfort women”.

Disputes rooted in disagreements over whether Japan has shown sufficient contrition for its history have hurt trade and hindered cooperation between the two US allies on dealing with North Korea and sent relations between the neighbours to their lowest point in years.

In 2015, Japan and South Korea announced a “final and irreversible” agreement that came with a personal apology to the women from Prime Minister Shinzo Abe as well as about US$9.3 million (S$13.2 million) for a compensation fund for the women.

But many South Koreans opposed the deal, which was signed without consulting the victims, some of whom refused the money in protest. Under Mr Moon, who took office in 2017, South Korea effectively shut down the fund, angering Tokyo.

Ties soured further when South Korea’s Supreme Court in 2018 ruled that Japanese companies were liable for compensation for Koreans conscripted as workers during Japan’s colonial rule.

Japan contends all such claims were “settled completely and finally” in a 1965 treaty that established diplomatic relations between the two sides.

Ms Lee Yong-soo, the woman trafficked to a military brothel in the 1940s, once took part in weekly protests outside Japan’s embassy in Seoul organised by the activist group but has since given up on participating out of anger of what she sees as the group’s wrongdoing.

Money that was supposed to be used as a shelter for ageing victims was instead allegedly used by Ms Yoon’s family as a residence and later sold, Yonhap reported.

“Prosecutors will discover the truth,” Ms Lee said in a news conference on Monday.

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