North Korean leader Kim Jong-un apparently remains determined to rein in the military, whose power under former leader Kim Jong-il had turned it into a state within the state.
Former army chief Ri Yong-ho, who was sacked in July, is under house arrest at a hot spring in North Hamgyong Province, South Korean intelligence have learned. Also, two business fronts of the North Korean military that were responsible for bringing in hard currency have been placed under state control.
According to sources, Ri was recently put under house arrest near a hot spring in North Hamgyong Province after being monitored in Pyongyang around the clock. "Ri commands a lot of respect from frontline troops so it is difficult for Kim Jong-un to dispose of him," the source added.
The two business fronts were consolidated into a single entity and placed under state control, demonstrating Kim's determination to gain control of the military's key source of foreign currency. The two businesses had been raising money for the military by selling bituminous coal and gold to China.
An informed source in China said the representative of a North Korean trading company in Dandong was recently ordered back to the North.
Former leader Kim Jong-il's rule was overly reliant on the military after he pitched his "songun" or military-first doctrine during the late 1990s, when a severe famine caused more than 1 million North Koreans to starve to death.
Over the years the power of the military increased exponentially and it took on many businesses. "At a point when the ration system virtually collapsed, the military made up for a lot of the shortfall through its own businesses," said one senior North Korean defector. "Once the source of money is taken away, it becomes impossible to run the army."
The source said there is a lot of grumbling among frontline commanders over the appointment of Choe Ryong-hae as chief of the Politburo, which monitors the military, since he has no military experience.
Amid the military reshuffle led by Kim Jong-un, Gen. Kim Yong-chol of the National Defense Commission, who apparently orchestrated the sinking of the South Korean Navy corvette Cheonan and artillery shelling of Yeonpyeong Island, was recently demoted to lieutenant general, while six out of nine corps commanders were sacked, according to the latest intelligence.
Kim Jong-un said late last month that officers who are not loyal to the Workers' Party or the leader are "unnecessary" even though they may be adept at military strategy and operations. The comments are viewed as a warning to Ri loyalists.
Kim has also forced frontline commanders to sign a loyalty oath and pledge not to confiscate food from local farms in order to restore discipline, according to one government source here.
But a high-ranking government source here said frontline commanders and their troops are still tightly controlled, so it is unlikely the military will go overboard flexing its muscle.
Defense Minister Kim Kwan-jin said earlier this month that the power transfer in North Korea went relatively smoothly and Kim demonstrated leadership.
But one intelligence official here said, "We cannot rule out a provocation by North Korea in order to show off its presence, so we are closely monitoring North Korean military movements ahead of the presidential elections."