S Korea warns North over 'illegal' asset freeze

South Korea warned North Korea on Friday that it had acted "illegally" in freezing the assets of South Korean companies and staff expelled from the jointly run Kaesong industrial zone.

Seoul's Unification Minister Hong Yong-Pyo said Pyongyang's decision to kick out the South Korean firms was "very regrettable" and added the North would have to take full responsibility for any consequences.

North Korea on Thursday said it was closing Kaesong completely and placing it under military control.

All South Koreans working in the zone, which lies 10 kilometres inside North Korea, were expelled and told they could only take their personal belongings.

It also ordered a "complete freeze" of all assets left behind, including raw materials, products and equipment.

Pyongyang said the move was a response to Seoul's decision the day before to shut down the operations of the 124 South Korean companies in Kaesong -- a protest at the North's recent nuclear test and long-range rocket test.

"North Korea expelled our people with very short notice, banned them from taking out finished products and illegally froze valuable assets," Hong said.

He also condemned the "unjustified and extreme measure" taken by Pyongyang of cutting off the only two remaining communication hotlines with the South.

"North Korea will have to take responsibility for anything that happens now," he added, without elaborating.